A growing number of companies are rescinding job offers as the outlook on the economy appears to dim. Companies including Twitter, RedFin, and Coinbase, as well as others in the insurance, retail marketing, consulting, and recruiting services sectors, have withdrawn offers in recent weeks, leaving workers scrambling to find jobs. Kathryn Minshew, CEO of the career development platform Muse, explains why this phenomenon is happening, and what workers can do if they're in this position. "What we're seeing right now is really a tale of two labor markets. It's very interesting if you crunch the data out there because there are many sectors of the economy where hiring is still incredibly competitive, where it is still very much a jobseeker's market, and in other sectors of the economy, particularly in big tech, in crypto, in certain startups, there is a pullback and either hiring freezes or job offers being rescinded," she said.

Opening Bell

'Tale of Two Labor Markets': Recession Fears Lead to Rescinding Job Offers

here to tell us more about it, Kathryn Minshew ceo of the muse, thank you so much for joining us, I didn't even realize this was legal. I'm wondering will more companies be rescinding job offers? What are you seeing? Well, I'll say first, I hope not because it's really not best practice in the industry. We are seeing it right now and we're sending a job offer typically comes when a company feels it has over hired or overextended itself and suddenly it needs to pull back and so in some cases, rather than doing layoffs or letting go existing employees, one of the first steps is actually to take back job offers that have already been made and signed that said, it causes a lot of disruption as you can imagine in the lives of people whose offers are rescinded. Um and so I think it's um it's something that we are seeing in a few cases, some tech companies, but you know, personally I would say I'm very much hoping that it does not spread and currently it does seem to be a fairly limited phenomenon. Yeah, I really feel for those candidates because we know especially in especially in competitive job markets or for roles that are specialized, these can be really long processes, you know, lasting weeks or even months in some cases, so to go through that process and then have a job cold is just, it's horrible. Um I also want to ask you why this is happening right now when we're hearing from so many experts that the job market is healthy, unemployment is down? Why do you think that's the case? Well, what we're seeing right now is really a tale of two labor markets. It's very interesting if you crunch the data out there because there are many sectors of the economy where hiring is still incredibly competitive, where it is still very much a jobseeker's market and in other sectors of the economy, particularly in big tech, in crypto, in certain startups, there is a pull back and either hiring freezes or job offers being rescinded. And so I think it's really hard for a job seeker out there to know, you know, what's going to be the case with my offer with my search because we are seeing such extremely different things in these different sectors of the labor market. So it makes sense now that you mentioned some of these different industries like tech like crypto that are being hit hard and having to pull back and make those adjustments accordingly, especially based on company to company. I'm wondering if you think there are other industries or sectors that are particularly vulnerable to this practice and again, we hope this doesn't continue to be something that's adopted um because it just seeds in more distrust I think between employers and employees. Oh, I think it's honestly rescinding job offers should be a last resort for employers. It is incredibly disruptive. We're hearing stories of, you know, recent grads who made signed leases and made plans to stay in the country? For example, um individuals whose employment is tied to a work visa. Their lives are often thrown into absolute disarray by the rescinding of a job offer. Um, and on top of that, you know, as my role as ceo of the muse, I hear a lot from HR managers who will get frustrated if they for example, hire an employee and that employee doesn't show up on the first day of work or you know, take some takes a different job after they've accepted. That is the the other side of the same coin here. So I think that, you know, I'm, I'm really hopeful that companies use rescinding job offers only only only as a last resort. And we're seeing some companies actually pay out severance to people or some, you know, they'll cover some rent, they'll give some payment to people who they have signed a contract to employ and then taken that back right now. It is primarily happening in, you know, a small corner of the economy. It is highly valued tech, some might say overvalued tech, it is crypto and web three. So, you know, I think that my, my, my deepest hope is that this does not spread to other sectors and I think right now the rest of the higher end market is staying strong, but we are keeping a really close eye on it. Yeah, appreciate you also illustrating the opposite side of the equation, I think transparency across the board between those that are hiring and those that are being hired is really important, especially right now, but I wonder this is something that we haven't typically talked about before jobs rescinding these offers, withdrawing these roles especially after a contract has been signed and the ink is dry. So what do you think this says about the current state of the economy? You know, I think it speaks to two things first. Obviously we are seeing that some sectors of the economy are experiencing a very sharp pullback and again, this is most pronounced in areas like, you know, certain highly funded venture backed startups or in the crypto and web three space that were incredibly highly valued just a few months ago in some cases highly valued, you know, many, many multiples in excess of what the previous highest valuations in those spaces have been. When you look at, for example, a multiple of the revenue they were making. So in sectors like that as the funding market has cooled as the stock market has pulled back, there's been a reckoning among some of these companies that they have to rein in expenses, they have to slow or stop hiring and in some cases that is leading to this rescinding of job offers, which again, um you know, I think is, is really just should be a last resort on behalf of employers because of the disruption that that it adds to, you know, to the labor market into the lives of these prospective employees. Also want your advice on what you do if you're a worker put in this situation. I especially think of young college grads that are coming out of education and moving into the job market maybe for the first time and experiencing this. Yes. So first of all, I would say as tempting as it might be to fire off the screen to the employer that just rescinded your job offer or to really, you know, let them have it. I would advise against that. I would say keep the door open and you know, thank them for letting you know, tell them that you would love to be considered if they reconsider or if they re start hiring in the future and try and keep that relationship warm because you never know where it might come in handy. Secondly, I would look back at your job search process and think about where their other companies that you pulled out of the interview process offers that you turned down. It is totally okay. In fact encouraged to reach back out to those companies. You know, some job seekers that we, that we hear from on the muse, they feel embarrassed, They're like, you know, can I go back to someone that I told no, absolutely, if the company wanted you a few months ago, there's still a really good chance that they're interested in talking to you now. And so starting with those warm relationships um is a great place to begin and you can simply say hi after accepting a job with another company, you know, that position was rescinded based on economic factors out of my control. So I'm back in the job search, I really enjoyed our conversations, you know, is this a good opportunity to re engage? Um and I would finally just encourage people not to panic. I know that having a job offer rescinded is incredibly disruptive, frustrating event, but there are still so many employers hiring, we see this every single day on the muse, companies in other sectors that are, you know, full speed ahead, They're looking for great talent. So, um you know, I would say as much as this is a bump in the road, it is a, you know, unpleasant obstacle there right now are still a lot of roles out there and I would encourage someone to keep looking um and not give up hope, such good advice for this really uncertain job market, appreciate you coming on the show. That's Kathryn Minshew Ceo of the muse