Last year, employers in the United States cut nearly one million jobs, which is the highest number of layoffs since 2020. Companies of every size are looking for ways to minimize their workforce.
For example, GM cut more than 6,000 jobs over the past two years, even though they had rising profits and strong stock performance. Amazon has eliminated more than 27,000 jobs since 2022. Not because they were losing money. Profitable corporations are eliminating jobs because of a new reality - they can grow revenue without adding employees.
Labor expert Andy Challenger noted that job cuts at this level have historically occurred normally “during recessions or… during the first wave of automations that cost jobs in manufacturing and technology.”
Amazon CEO Amy Jassy openly said that AI will “reduce our total corporate workforce as we get efficiency gains.” Now, while not every job loss is AI-related, Anthropic CEO Dario Amodei says that AI could eliminate half of all entry level white-collar jobs and increase unemployment from today’s 4% to 10% to 20% in five years.
(Now, I’m not sure about the unemployment statement. I believe that there will be a major shift in this country in the next few years from white collar jobs back to manufacturing and the trades. It will take time, but I believe for our country to survive economically, this shift needs to happen.)
One of the biggest problems that needs to be addressed is the trend of households no longer having a safety net. Get this: 21% of Americans have zero emergency savings. Zero! Just 46% have three months of expenses saved and that’s considered bare minimum since the average job search goes from four to six months.
When you’re out of work, you still have bills to pay. In the US alone, total household debt was $18.58 trillion last year. Credit card balances: $1.23 trillion. Auto loans: $1.66 trillion. It it any wonder why so many people are looking as other ways to earn money?
In addition to emergency money, financial planners normally recommend multiple income streams. And while adding one can be a smart thing to do, it takes time and consistent effort. So before your commit to a new side career to produce supplemental income, you should ask yourself a few critical questions;
- Is it stable? Will this extra income endure when the economy tightens, or does it rely on short-term demand?
- Is it repeatable? Does it build ongoing value through real customer relationships, or does it reset to zero constantly?
- Is is essential? Are you offering something people truly need and will continue to pay for, even in uncertain times?
- Is it scalable? Can your work grow into something that strengthens families and communities, not just fill spare hours?
While we can’t control what corporate America is going to do with AI restructuring, you can may smart financial decisions, like avoiding debt and building income diversification today before circumstances force you to do it.
As the saying goes, “The best you’ve to plant a tree was 20 years ago, The second-best time is now.”
That is why those of us at Seagull Technologies work with people who want to build a backup income to secure their future for themselves and their families. Ready? Just ask.
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