Tech Lay-off Cycles Might Be a Result of Recession Risk

What the Tech Lay-off Cycles at Stripe, Twitter, and other companies could mean for the economy?

The term "labor hoarding" has recently come into play within economic circles as the job market remains strong despite the Fed's best efforts to cool it down. Tech Lay-off Cycles that have made the headlines recently, from Stripe to Twitter, are concentrated in sectors of the economy most sensitive to interest rates, such as housing and autos, and where companies "over-hired," predominantly in technology.

Several demographic factors, from baby boomer retirements to a declining working age population and persistently low labor force participation rate, are reasons employers may be less likely to pull the trigger on Tech Lay-off Cycles.

The latest jobs report shows labor market growth remains strong with U.S. payrolls surging by 261,000 in October, though there was a slight uptick in unemployment to 3.7%.

But the balance is going to shift and the leverage employees have had will be lower in a recession, and now may be the last, best chance for restless job seekers to make a move before it's too late.

"There have been several thousand high-profile layoffs in the tech sector in the past couple of weeks. While this is unfortunate, it is useful to keep in mind that the labor market is significantly larger and has been overall healthy," Bledi Taska, chief economist at labor market consulting and research firm Lightcast, said in an email.

Labor hoarding has become a thing given how hard it is to find workers to fill open positions. Taska is still hesitant to read the labor billboard and says the fundamentals of labor economics in a recession are undeniable.