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.
The giant internet retailer added 500,000 workers around the world during the year—more than 400,000of 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 arevoting on whether to unionize.
The overall U.S. labor market is healing from the pandemic’s shocks. Employersadded 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.
For example,PepsiCoInc.’sPEP-0.38%addition of 24,000 jobs last year—a 9% increase over 2019—was largelydriven by acquisitions, including SodaStream International Ltd. About 1,300 ofCostco WholesaleCorp.’sCOST-0.37%19,000 new jobs came from theacquisition last yearof what is now Costco Logistics, Chief Financial Officer Richard Galanti said.
Among companies adding workers, the median increase was 6.6%.FacebookInc.’sFB+0.12%workforce grew by 30%, or almost 14,000 jobs. Biotech giantBiogenInc.BIIB-0.80%added 1,700 workers, about 23%.
FedExCorp.’sFDX+0.32%staffingincrease 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, beforemerging last yearand spinning offOtis WorldwideCorp.andCarrier GlobalCorp.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 thatGeneral ElectricCo.GE-0.15%shed last year went with the sale of its lighting and biotechnology-supply divisions. Aluminum makerArconicInc.HWM+0.00%employed 41,700 in 2019, beforesplitting into two companiesin April 2020: Howmet Aerospace Inc., employing 19,700, and Arconic Corp., employing 13,400, as of Dec. 31.
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 makerTeslaInc.TSLA-0.61%added about 22,700 workers during the year—handily exceeding the loss of workers reported by larger Detroit rivalsFord MotorCo.F+0.71%andGeneral MotorsCo.GM-0.11%
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 chainLas Vegas SandsCorp.LVS+0.73%reported an 8% decline in its workforce. AtMGM Resorts International,MGM+1.27%which employed significantly more people in 2019, head count fell by 36%.
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 increasinglyfocused 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.
FastenalCo.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.
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.”
As a Partner and Co-Founder of Predictiv and PredictivAsia, Jon specializes in management performance and organizational effectiveness for both domestic and international clients. He is an editor and author whose works include Invisible Advantage: How Intangilbles are Driving Business Performance. Learn more...
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