A Blog by Jonathan Low


Apr 6, 2021

Report: During Pandemic, Largest US Employers Added More Jobs Than They Cut

Amazon added 500,000 (400,000 in the US). FedEx added 50,000. PepsiCo added 24,000. Tesla added 22,000. Costco added 19,000. Faceboook added 14,000. 

One could conclude that the rich got richer and the big got bigger. JL 

Theo Francis reports in the Wall Street Journal:

While Covid-19 ravaged the broader American economy, the largest U.S. employers added more jobs than they cut. Global employment rose by about 370,000 people among the 286 members of the S&P 500 that filed annual reports between July 1 and March 31. Job losses fell unevenly across sectors. Most tech and healthcare companies added workers; no energy company did. 133 companies in the Journal analysis shrank their workforces. The median decline was 5.1%, and a dozen companies lost a quarter or more of their workers. Among companies adding workers, the median increase was 6.6%.

While Covid-19 ravaged the broader American economy, the largest U.S. employers added more jobs than they cut.

Overall, global employment rose by about 370,000 people among the 286 members of the S&P 500 that filed annual reports between July 1 and March 31, a Wall Street Journal analysis of securities filings shows.

Those gains masked wrenching changes and job losses for workers in many companies and industries. And the net gain in jobs for 2020 wouldn’t have happened without a single company: Amazon. AMZN +0.09% com Inc.

World BeaterAmazon added nearly as many jobs last yearas 136 other companies that added jobs.Net change in employment in 2020Source: the companiesNote: Reflects S&P 500 companies filing annualreports with the Securities and ExchangeCommission since July 1.
AmazonFedExUPSTJXPepsiCoTeslaBorgWarnerCostcoMicrosoft128 othersAmazonAll others0 thousand200400600

The giant internet retailer added 500,000 workers around the world during the year—more than 400,000 of them in the U.S. Amazon created nearly as many jobs last year as the 136 other companies in the Journal analysis that added workers.

“By hiring that many people, we were not only able to deliver essential items for our customers during a critical time, but also provide an opportunity to those who lost their jobs or saw their hours cut because of Covid,” said Beth Galetti, Amazon’s senior vice president for human resources. “Amazon became an ‘employment beacon’ for hundreds of American communities.” Workers at an Amazon warehouse in Alabama are voting on whether to unionize.

The overall U.S. labor market is healing from the pandemic’s shocks. Employers added 916,000 jobs in March, the biggest gain since August. The unemployment rate fell to 6.0%.

The figures in the Journal analysis reflect global employment. Most firms don’t disclose U.S. employment. Companies don’t always disclose whether staffing changes stem from layoffs, attrition, deal making or other factors.

Cut RateEleven big U.S. public companies each cut20,000 or more jobs globally.Employment change in 2020(percent of total)Source: the companiesNote: For S&P 500 companies filing annual reportswith the SEC since July 1. *Includes spinoff of OtisWorldwide and Carrier Global. †Includes divestituresof lighting and pharmaceutical-supply operations.††Renamed Howmet Aerospace after separation ofArconic Corp.
Raytheon*(-26%)Marriott(-30%)Carnival(-34%)GeneralElectric†(-15%)MGM(-36%)Arconic Inc.††(-53%)Comcast(-12%)UnitedAirlines(-23%)Boeing(-12%)Schlumberger(-19%)Disney(-9%)0-75 thousand-50-25

For example, PepsiCo Inc.’s PEP -0.38% addition of 24,000 jobs last year—a 9% increase over 2019—was largely driven by acquisitions, including SodaStream International Ltd. About 1,300 of Costco Wholesale Corp.’s COST -0.37% 19,000 new jobs came from the acquisition last year of what is now Costco Logistics, Chief Financial Officer Richard Galanti said.

Among companies adding workers, the median increase was 6.6%. Facebook Inc.’s FB +0.12% workforce grew by 30%, or almost 14,000 jobs. Biotech giant Biogen Inc. BIIB -0.80% added 1,700 workers, about 23%.

FedEx Corp.’s FDX +0.32% staffing increase of 50,000, or 11%—which reflects the fiscal year that ended last May—was driven in large part by sharply higher demand for e-commerce, a spokesman said.

In all, 133 companies in the Journal analysis shrank their workforces. Among them, the median decline was 5.1%, and a dozen companies lost a quarter or more of their workers. Eighteen reduced their head count by at least 10,000 people.

Deal making resulted in shrinking some workforces. Raytheon Technologies Corp. and United Technologies Corp. employed 313,200 in 2019, before merging last year and spinning off Otis Worldwide Corp. and Carrier Global Corp. The spinoffs ended 2020 with a combined 125,000 workers; Raytheon employed 181,000 on Dec. 31.

About a fifth of the 31,000 workers that General Electric Co. GE -0.15% shed last year went with the sale of its lighting and biotechnology-supply divisions. Aluminum maker Arconic Inc. HWM +0.00% employed 41,700 in 2019, before splitting into two companies in April 2020: Howmet Aerospace Inc., employing 19,700, and Arconic Corp., employing 13,400, as of Dec. 31.

Gainers and LosersWorkforce changes at S&P 500 companies bysector.Source: the companiesNote: Firms filing annual reports since July 1.
fewer workers in 2020 than 2019flat or less than 1% changemore workers in 2020 than 2019TechHealthcareConsumerDiscretionaryCommunicationServicesOverallConsumerStaplesFinancialsReal EstateIndustrialsMaterialsUtilitiesEnergy0%50100

The pandemic also took its toll. Marriott International Inc. MAR +0.75% staff plummeted with the decrease in hotel stays. After sailings were suspended, Carnival Corp. CCL +0.44% shed 34,000 cruise-ship workers, more than a third of its total, while onshore staff declined by 2,000, or about 14%. Most of Comcast Corp.’s CMCSA -0.26% declines came at its NBCUniversal unit, which curtailed its theme-park operations for most of the year and underwent a reorganization in the fall. United Airlines Holdings Inc. UAL +0.13% early this year hired back about 13,000 of the 21,600 workers idled in 2020, but the company said that relief would likely end once federal aid runs out this spring.

More broadly, job losses fell unevenly across sectors. Most tech and healthcare companies added workers; no energy company in the Journal analysis did.

Longer-term trends continued to play out as well. Electric-car maker Tesla Inc. TSLA -0.61% added about 22,700 workers during the year—handily exceeding the loss of workers reported by larger Detroit rivals Ford Motor Co. F +0.71% and General Motors Co. GM -0.11%

Pack LeaderAutomakers' global workforce in 2020Source: the companies
head countreductionsadditionsTeslaFordGM0 thousand50100150200

A GM spokesman said the company is investing heavily in electric vehicles and plans to add about 2,200 jobs in Michigan and 1,400 to 1,700 in Ontario as it reopens and retools plants, including some that will produce electric vehicles.

A Ford spokesman said the company is in the process of refocusing and streamlining its business to modernize and simplify operations, including for electric-vehicle production.

Even within an industry, employment moves varied. Casino chain Las Vegas Sands Corp. LVS +0.73% reported an 8% decline in its workforce. At MGM Resorts International, MGM +1.27% which employed significantly more people in 2019, head count fell by 36%.

Bringing Down the HouseChange in global workforce at casino rivalsSource: the companies
2020 head countreduction from 2019Las VegasSandsMGMResorts0 thousand100255075

With more than 20 casinos in the U.S., including a dozen on the Las Vegas Strip, MGM is more exposed to the hard-hit American economy, as well as to tourist travel in the U.S. By contrast, Las Vegas Sands has increasingly focused on foreign markets, generating nearly half its 2020 revenue in Macau and a third in Singapore—and in early March said it would sell off its remaining U.S. properties.

In MGM’s proxy statement filed March 26, Chief Executive Bill Hornbuckle called the company’s widespread layoffs and furloughs painful but necessary as the Las Vegas Strip shut down and international gambling travel slowed. “We’re optimistic that business will continue picking up and allowing for us to call back and hire a significant number of employees,” an MGM spokesman said.

Companies hit hard by the pandemic tended to cut more jobs, but workforce changes and company results didn’t always move together.

Fastenal Co. FAST -0.08% , which distributes bolts and supplies for construction and industry, reduced its workforce by nearly 1,600 people during the year, or 7.2%. Profit rose 8.6% and shareholders booked a 36.6% total return, including share-price appreciation and dividends.

Nuts and BoltsYear-over-year change in 2020 at FastenalSource: the company (workforce, revenues, income);Institutional Shareholder Services (total return)
WorkforceRevenueNet incomeTotal return02040-20%

Much of that staffing decline involved part-time workers, with full-time employment falling just 2.5% as health restrictions and reduced demand idled distribution hubs and other operations, said Holden Lewis, Fastenal’s chief financial officer. Many of the part-timers were out-of-town students who went home when their colleges closed, he added. And managers didn’t fill jobs as employees left.

“We leave decisions in the field around head count—what happens in any downturn is they wind up letting attrition work for them,” Mr. Lewis said. He said headquarters urged managers to retain workers where possible.

At the same time, Fastenal’s financial results benefited as it supplied face masks, gloves and other protective gear to existing and new customers, bypassing its usual distribution network to ship directly to customers in the interest of speed, he said.

Last spring, “we had no idea what our financials would look like, but we thought they were going to be a lot worse than they were,” Mr. Lewis said. “We believe we operated with the integrity of spirit that I think companies in our position should have.”



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