As fears of a recession grow, big tech companies have begun announcing hiring freezes and layoffs. This includes recent announcements from Meta, Google, Spotify, and more. The job market woes come amid strong job market reports so far in 2022, with unemployment sitting at 3.6 percent in June. Nolan Church, co-founder and CEO of Continuum,  joined Cheddar News to discuss the current job market landscape and what he forecasts in the coming months. Church outlines that even given the positive numbers with current inflation, the impending Fed hikes, and shifting job priorities do not paint a rosy picture for the months ahead. "I mean we've seen great numbers with the data for quite a while now. Eleven-million jobs are still open, but there's definitely dark clouds on the horizon," he said.

Opening Bell

'Dark Clouds on the Horizon' as Big Tech Announce Hiring Freezes, Layoffs

And joining me now to discuss is Nolan Church co founder and ceo of talent marketplace continuum. Thanks so much for joining us to talk about this. Um we know american jobs numbers have been very strong the past few months and we hear it's a sign of economic resilience. Is this what you're seeing? I continuum as well or do you think there are cracks forming in the labor market? Look to your point, I mean we've seen great numbers with the data for quite a while now. 11 million jobs are still open but there's definitely dark clouds on the horizon. As you had mentioned, some of the biggest companies are starting to pull back meta and coin base where two of the first google also announced a hiring freeze last week, as you also mentioned with Apple. So what we're seeing with our customers is our customer base by the way is is pre I. P. O. Tech companies, 20% of those customers have already conducted layoffs and I'd say about another 30-40% are currently having layoff discussions right now as far as what you can tell is this hiring slowdown that we're seeing taking place only in specific industries or do you think it has the ability or it's already starting to spread to other sectors as well. Certainly. So in technology it's happening right now, especially with early stage technology and you're also seeing it with the bigger companies as well. We are seeing resiliency in some industries um specifically travel and hospitality is looking really strong right now, retail is still looking okay. But the biggest concern is that if we start to see demand slow down. You know, even in technology or some of these other industries, it could trickle to these other sectors and then we could start to see a more widespread recession which some people believe we're already in. Yeah. A lot of guests that we've had on the show have been trying to make the distinction between a recession and a technical recession. And this is also coming on the heels of this week, we're looking to the Fed to release new data poison to announce another rate hike soon. How do you expect? This will impact the job market. I expect the Fed is going to continue to raise rates until they get inflation under control. And unfortunately inflation doesn't look like it's under control at all right now. And so as the Fed continues to raise rates, the cost of capital becomes more expensive and thus we are going to see companies start to pull back. Ceos are telling me that the macro economic environment uncertainty is causing them to re plan and to narrow their focus. So because of that, you know, you have these concerns about future demand. Um And so that is the primary fear that the C. E. O. S. Have. And so they are going to pull back even though they may not be seeing headwinds in their business today they're expecting in the future. Yeah, we've already seen it this past week with earnings report like those coming from snap talking about how these Pullbacks from relatively healthy businesses have led to lower ad budgets and that's hit companies like snaps bottom line and we saw sympathy trading happening this week off of that company. These companies are even bigger to a point that one of our guests made just earlier. I'm wondering if you think this pullback from companies looks like mass layoffs? Well, what's interesting is is that if you look at early stage technology, which I do believe it's a bellwether for the economy According to layoffs that F. Y. I there have already been 56,000 employees laid off this year. I expect that number to double in the next quarter. And so if that continues to trickle to later stage technology companies and then into other sectors, I think we're going to see a bigger pullback than what the Fed is currently expecting. And given that they only have a few levers to pull to tamp inflation, such as raising rates. I get pretty concerned about what the future looks like. Yeah, it does make you think that this could lead to something beyond the technical recession and more of that description that we've seen in previous recessions unfortunately hope it doesn't go into that direction, but that's essentially what it would mean if the labor market was not healthy and to that point also inflation is high. We've been talking about it over the course of this conversation, How does that impact hiring? Yes. So with it as inflation raises, ultimately, companies start to see the value of the dollar goes down. Um And ultimately as that happens that hurts consumers as they try to buy and buying power, uh it starts to get decimated and that is the biggest concern right now is that if demand starts to slow down, which we've already started to see an advertising already started to see in a few other industries, then ultimately these companies will not have the same capital to be able to invest in hiring and thus will pull back and thus will narrow their focus on on fewer projects and their core business. What do you and your team make of the jobs numbers right now? And what does it say about the everyday american out there? Have they stopped looking for jobs? What is the current status with a lot of these openings that have been out there for a long time but are going unfilled by major companies? Yeah, I think it's a tale of two cities which is with knowledge workers. We're already seeing the pullback happen but with blue collar workers, they're still incredible demand from companies and there are still many open jobs as it relates to knowledge workers. You're right, we still have had many open jobs for quite a while, but companies have learned to deal with it and they have been moving forward with these roles still open And thus I think that they're starting to think, well, you know, we've had this role open for 69, 12 months, maybe we actually don't need it anymore and especially given the uncertainty of what the future looks like, let's start to pull back. So as it relates to the job numbers today, look, I think we're looking backwards and they look okay. The biggest question is what happens as we move forward. We've been talking about inflation, we've been talking about the fears of CeoS And I just worry about what the next 3-6 months looks like if inflation does not get under control. It does also make you concerned about the great resignation sentiment and what this can mean for current workers in these different companies, especially in positions that are experiencing burnout. Um but I also want to piggyback on what we're discussing in the workplace here um for the past few months, everything I feel like the narrative has been about every power being in the hands of the employee or the job seeker right now with employers offering big benefits packages and also higher paychecks. Is that still the case? Or is the narrative changing slowly with all of the different economic pressures out there? It's absolutely changing. We've been talking about the great resignation now for almost a year and a half and that phenomenon has affected almost every industry in our country that said, as we started to see companies begin to pull back on hiring, we're starting to see employees starting to settle down, not moving as much and actually begin to look for more work. So my expectation is, is that we are going to see the pendulum shift. Um Absolutely. In the last 13, 14 years, as we have been in this bull market, the pendulum has shifted towards employees having more of the power. But now as the economy begins to contract as inflation begins to rise, I expect the pendulum to shift backwards more towards employers and employees beginning to settle down and not moving around as much as they have been in the last two years. If the pendulum as you mentioned, does shift to employers, what do you think this means a little bit of a curve ball for you. But what do you think it means for the organized labor movement? We've seen today, News of a strike coming for Boeing. We've talked about organized labor movements across the board with major companies like amazon Starbucks, Apple, it's been happening and strengthening over the course of this pandemic. Do you think this takes steam out of a lot of those movements? If we continue to feel a lot of these pressures? It depends on the industry. And so, you know, as you talk about companies like Boeing and amazon, we haven't seen demand destruction happen there yet. And so I believe that those labor unions still hold quite a quite a lot of power. But if you start to see some of these companies top lines coming down, I do think that that's when you're going to see these labor unions have to come back to the table and unfortunately, they will not have as much power as they've had in the last few years, especially as this money comes out of the economy. One of the things we haven't discussed in this conversation is quantitative easing, easing is now starting to end. And so you have two things happening at once with inflation rising and QE ending. And we've never been here before. And so we'll see what happens. It's so good to have your perspective. That's Nolan Church co founder and Ceo of Talent marketplace Continuum.