The pessimism, wrong track numbers and general vibes on the economy are already low so I will be surprised if these layoffs don’t turbo charge the negative vibe. (I’ve been surprised by this stuff before, so don’t take my word for it…)
Anyway, here are some predictions from economists:
The job cuts could ultimately be the biggest in U.S. history. IBM’s purge of about 60,000 workers in 1993 is thought to be the largest corporate layoff.
The Trump administration’s purge of federal workers may ultimately amount to the biggest job cut in U.S. history, which is likely to have ramifications for the economy, especially at the local level, according to economists.
[…]
There were about 220,000 federal employees with less than a year of tenure as of May 2024, according to the most recent data from the U.S. Office of Personnel Management.
Additionally, more than 75,000 federal workers have accepted a buyout offer, according to a Trump administration official. They agreed to resign but get paid through September.
The total of these two groups — nearly 300,000 workers — would make these actions amount to the “largest job cut in American history (by a mile),” Callie Cox, chief market strategist at Ritholtz Wealth Management, wrote Tuesday.
That sum doesn’t include others who may be on the chopping block, such as contractors who work at the U.S. Agency for International Development. Career civil servants who got promotions in the past year are also at risk of losing their jobs, since they’re technically on probation in their new role, Jesse Rothstein, a public policy and economics professor at University of California, Berkeley, said in a podcast Thursday.
Some of them pooh-pooh the idea of a recession because of this but they all understand that massive layoffs, deportations of large numbers of workers and Trump’s tariffs are all adding up to economic turbulence.
I like to think that might be the thing that finally pressures Trump into taking a breath and stopping the shock and awe campaign. But honestly, I think he totally believes his own hype now and is pretty much impervious to public opinion. Sadly, it will probably take a major crisis — and we already know how he handles those.