As the economy continues to struggle amidst the ravages of 40-year-high inflation, employers are finding it increasingly difficult to maintain their current staffing levels.
While the tech industry has been the epicenter for layoffs thus far, a growing number of industries are being affected as well, including banking, financial, and legal services, and media outlets.
The trend for mass job cuts appears to be accelerating. Although the number of overall layoffs has been relatively steady throughout 2022, “mass layoffs” (i.e., cuts of over 100 jobs) began to accelerate toward the end of 2022. While 125,000 jobs were lost as a result of mass layoffs in all of 2022, November alone accounted for 46,000 of those job cuts or about 37% of the annual total. With several employers announcing mass layoffs for January, early warning signs indicate that this acceleration may continue into 2023.
Employers contemplating layoffs should consider the associated legal risks and obligations. Several federal laws may be implicated such as the Worker Adjustment and Retraining Notification Act (WARN Act), the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA). California employers also should be aware of the California WARN Act (approximately 9 states have similar “mini-WARN” acts on the books).
Twitter’s experience may provide a cautionary tale: A class action lawsuit has been filed against the company for allegedly failing to give the required 60-day notice in violation of both the federal and California WARN Acts.
As always, it’s prudent for employers to consult with counsel to ensure compliance with applicable federal, state, and local laws.