Corporate Layoffs Spike As Companies Prepare For Tariff Shocks

At the beginning of this year corporate layoffs accelerated with thousands of DEI program employees (dead weight) thrown to the curb, but the streamlining isn’t stopping there.  The cuts are not stopping despite solid growth in overall sales and volume (amount of goods sold) in the US.  This might seem counter-intuitive, unless the layoffs are in preparation for a perceived incoming downturn.

The primary factors influencing job cuts are, of course, tariff uncertainty and inflation.

Target’s latest announcement of 1000 layoffs and 800 positions eliminated focuses on it’s global corporate workforce.  Leftists claim these cuts are a consequence of their supposed “boycott” of Target after the company rolled back DEI initiatives, but there is no evidence to support this.  Target did take a heavy hit from conservative boycotts in 2024 after the company tried to introduce LGBT apparel for children, but again, the white collar cuts are global and are more likely related to tariff uncertainty and inflation.   

And Target is not alone.

Nestle has announced over 16,000 layoffs over the next two years with 12,000 coming from the white collar workforce. 

UPS cut over 12,0000 white collar jobs in 2024 and in July they began shuttering 73 sites and eliminating 20,000 blue collar positions.  The most recent layoffs are efficiency related in expectation of plunging global shipments due to tariffs as well as the loss of 50% of Amazon’s volume.

Rivian has eliminated 600 corporate jobs as electric vehicles suffer another year of decreasing consumer interest.

Nike is instituting 2000 white collar layoffs in a restructuring bid.  Nike is in fact suffering from revenue losses, plunging 9.8% year-over-year.  Furthermore, their business model relies heavily on China (24% of manufacturing), which is a primary target of Trump’s tariffs. 

Starbucks is dropping 900 corporate employees this month following 1,100 cuts in February.  

Chip company Applied Materials is laying off 1400 white collar workers.  

Morgan Stanley is cutting 2400 employees from its wealth management and admin roles.

Cable giant Charter is eliminating 1200 management jobs.

GM is downsizing approximately 3500 workers total in 2025, citing slowing EV sales and tariff headwinds.

Amazon plans to cut up to 30,000 corporate jobs (represent nearly 10% of the company’s roughly 350,000 corporate employees) as the company works to pare expenses and compensate for overhiring during the peak pandemic demand

From a cost perspective, HQ employees are far more of a burden on a company’s bottom line.  Target, for example, stands to save up to $171 million on employees salaries and benefits in a single year by removing 1800 positions.  However, this is only a portion of the $846 million the company has lost in sales from 2024 to 2025.  Meaning, more Target layoffs are probably coming soon.

Streamlining job cuts tend to act as the beginning of a greater avalanche of terminations rather than a fine tuning of labor as they’re often portrayed.  Meaning, this trend is going to continue well beyond the next year. 

Inflation has slowed dramatically since the Biden Administration but prices remain high on most necessities including food, energy and housing.  To be fair to Trump, it takes a lot more than 10 months to reverse a stagflationary crisis once it has started.  A deflationary event is needed to bring prices down (or a massive production increase to create oversupply) and higher interest rates have not produced the proper drag on demand. 

In fact, Americans are spending more than ever and taking on more debt than ever.  This is a bad thing if we’re talking about finally reducing prices on goods and services.

As for tariffs, a tax on corporate outsourcing is a good thing and long overdue.  The problem is that the positive effects are slow.  Manufacturing is being shifted from other countries back to the US, but not at a scale that’s going to revitalize the middle class in the near term.  In other words, the public should expect multiple years of economic pain to produce significant gains.  Anyone who believes there’s an easy way out of stagflation is living in a fantasy land.    

A number of companies are clearly coming to this realization and reducing costs (and jobs) to protect themselves from future pitfalls.