Retailers Lead April Job Cuts as Consumers Pull Back

April layoffs in the retail space led all other industries, jumping 270% from March.

That’s according to a report from employment service Challenger, Gray & Christmas (CGC), which also found retailers cut 14,689 positions in April and 36,115 this year, an 843% increase over the same period in 2022. Also cutting jobs last month were consumer product manufacturers, which slashed 9,146 roles for a total of 19,116, a 391% increase from April 2022.

“Retailers and consumer goods manufacturers are preparing for a tightening in consumer spending, particularly with the Fed’s hike to interest rates in an attempt to control inflation,” said Andrew Challenger, senior vice president of CGC in the report.

Some of that tightening is already happening, as research by PYMNTS has shown, with 69% of consumers saying they’ve cut back nonessential spending on retail products specifically because of high inflation.

Six out of 10 consumers said they’ve switched to cheaper retailers, while 35% have sacrificed product quality by going with less-costly, lower-quality goods.

This trend also extends to the grocery store, where one-third of shoppers are opting to purchase private-label brands or store brands to shrink their supermarket bill.

And in a trend that’s become particularly popular among older consumers, 57% of grocery shoppers have started cutting back on nonessential items.

“Trading down on quality is the one habit in which grocery shoppers minimize costs even more aggressively than their retail counterparts,” PYMNTS wrote last week. “Thirty-six percent of grocery shoppers purchase cheaper alternatives of the same products, such as store brands; this share is 35% for retail shoppers.”

Among retailers laying off workers last month was Gap, which announced it was cutting 1,800 jobs following an earnings report that saw it lose $1 billion in sales.

Meanwhile, the tech sector continues to lead all other industries in layoffs this year, the CGC report said. It came in second for April in the number of job cuts, with 113,944 positions eliminated this year, a number that accounts for a little more than a third of all layoffs for 2023.

Some of the tech companies cutting jobs in April included digital media companies Buzzfeed and Insider. However, April’s 11,553 tech job cuts were the lowest level for the industry since October of last year, CGC said.

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