Introduction to Corporate Layoffs

While the government cost-cutting initiative known as the Department of Government Efficiency, which resulted in thousands of federal job cuts, winds down, mass layoffs are still roiling corporate America. Companies are under increasing pressure to trim costs against the backdrop of global economic uncertainty brought on by President Donald Trump’s tariff policies. Several companies have announced price hikes. Layoffs mark another way to pull back.

Economic Uncertainty and Job Market

Trade tensions have also raised concerns about the general health of the U.S. economy and the job market. While the April jobs reading was better than expected, a separate reading from ADP this week showed private-sector hiring hit its lowest level in more than two years. Though many companies declined to provide specific reasoning for announced workforce reductions — instead lumping the layoffs in with larger cost-cutting strategies or growth plans — tech leaders are starting to cite artificial intelligence as a clear consideration in hiring and head-count reductions.

Companies Announcing Layoffs

Klarna CEO Sebastian Siemiatkowski told CNBC on May 14 the fintech company has shrunk its head count by 40%, in part due to investments in AI. Likewise, Shopify CEO Tobias Lütke told employees in April that they will have to prove why tasks can’t be performed by AI before asking for more workers and resources.

Procter & Gamble

Pampers and Tide maker Procter & Gamble said Thursday it will cut 7,000 jobs, or about 15% of its non-manufacturing workforce, over the next two years as part of a restructuring program. CFO Andre Schulten said during a presentation that the company is planning a broader effort to implement changes across the company’s portfolio, supply chain and corporate organization. The company did not specify the regions or divisions that would be affected.

Microsoft

Microsoft said on May 13 that it would reduce its workforce by about 6,000 staffers, totaling about 3% of employees across all teams, levels and geographies. A Microsoft spokesperson told CNBC at the time that one objective of the cuts was to reduce layers of management. The company announced a smaller round of layoffs in January that it said were performance-based. The spokesperson said the May cuts were not related to performance.

Citigroup

Citigroup said in a statement Thursday it plans to reduce its staff by around 3,500 positions in China. The cuts mostly affect the information technology services unit, which provides software development, testing and maintenance. Some of the affected roles will be moved to Citi’s technology centers elsewhere, the bank said. Under the leadership of CEO Jane Fraser, Citi has undertaken a large-scale reorganization with an eye toward profitability and stock performance. The bank consistently underperformed its major bank peers in recent years. Citi announced a broader plan in 2024 to reduce its workforce by 10%, or about 20,000 employees globally.

Walmart

On May 21, Reuters reported that Walmart was planning to slash about 1,500 jobs in an effort to simplify operations. The teams affected include global technology, operations and U.S.-based e-commerce fulfillment as well as Walmart Connect, the company’s advertising business. Walmart employs around 1.6 million workers, making it the largest U.S. private employer. CFO John David Rainey told CNBC during an interview May 15 that Walmart shoppers would likely see price increases at the start of the summer in response to tariffs.

Klarna

Siemiatkowski said in May that the 40% cut in head count is due not only to AI but also to attrition, after the company instituted a hiring freeze. The Swedish provider of buy now, pay later loans has been outspoken about its aggressive adoption of AI tools across the company, particularly in the customer service unit. The company said last year that AI was doing the work of 700 customer service agents.

CrowdStrike

Cybersecurity software maker CrowdStrike on May 7 announced plans to cut 500 employees, or about 5% of its staff. CEO George Kurtz in a securities filing attributed the move largely to artificial intelligence. "We’re operating in a market and technology inflection point, with AI reshaping every industry, accelerating threats, and evolving customer needs," he said, adding that the move was part of the company’s "evolving operating model."

Disney

The Walt Disney Company said Monday it plans to cut several hundred employees worldwide across several divisions. The layoffs affect teams in film and TV marketing, TV publicity and casting and development. The cuts are part of a larger effort to operate more efficiently, a Disney spokesperson said.

Chegg

Online education firm Chegg said on May 12 that it would lay off 248 employees, or about 22% of its workforce. The cuts come as AI-powered tools such as OpenAI’s ChatGPT take over education. CEO Nathan Schultz said on the company’s May earnings call that the layoffs are part of a cost reduction plan and he expects cost savings of between $45 million and $55 million this year, followed by a further $100 million to $110 million next year.

Amazon

Amazon said in May it would eliminate about 100 jobs in its devices and services division, which includes the Alexa voice assistant, Echo hardware, Ring doorbells and Zoox robotaxis. A spokesperson for Amazon told CNBC at the time the decision was part of an ongoing effort to "make our teams and programs operate more efficiently." The cuts come as CEO Andy Jassy has sought out cost-trimming efforts at the company. Since the beginning of 2022, Amazon has laid off roughly 27,000 employees.

Warner Bros. Discovery

Warner Bros. Discovery will lay off fewer than 100 employees, according to multiple media reports this week. No particular network or channel would be affected more than others, according to the reports. The WBD cuts follow the company’s move to reorganize into two divisions: a global linear networks division and a streaming and studios unit. That process was completed during the first quarter.

Conclusion

The recent wave of layoffs across various industries highlights the challenges companies face in navigating economic uncertainty and technological changes. As companies continue to adapt to these changes, it is likely that we will see more announcements of workforce reductions. The impact of artificial intelligence on the job market is a growing concern, and companies are being forced to re-evaluate their hiring and staffing strategies.

FAQs

Q: What is the main reason for the recent layoffs in corporate America?
A: The main reason for the recent layoffs is the economic uncertainty brought on by President Donald Trump’s tariff policies, as well as the increasing pressure to trim costs.

Q: Which companies have announced layoffs in recent weeks?
A: Companies such as Procter & Gamble, Microsoft, Citigroup, Walmart, Klarna, CrowdStrike, Disney, Chegg, Amazon, and Warner Bros. Discovery have announced layoffs.

Q: How many jobs will be cut at Procter & Gamble?
A: Procter & Gamble will cut 7,000 jobs, or about 15% of its non-manufacturing workforce.

Q: What is the reason for the layoffs at Klarna?
A: The layoffs at Klarna are due to investments in AI, as well as attrition after the company instituted a hiring freeze.

Q: How many employees will be laid off at Amazon?
A: Amazon will eliminate about 100 jobs in its devices and services division.

Q: What is the impact of artificial intelligence on the job market?
A: Artificial intelligence is having a significant impact on the job market, with many companies citing it as a reason for layoffs and workforce reductions.

Lululemon beat Wall Street expectations for fiscal first-quarter earnings Thursday, but cut its full-year earnings guidance, citing a “dynamic macroenvironment.” As the company navigates tariffs and fears about a slowing U.S. economy, CEO Calvin McDonald said in a news release that “we intend to leverage our strong financial position and competitive advantages to play offense, while we continue to invest in the growth opportunities in front of us.”

First-Quarter Earnings and Revenue

He said on a conference call with analysts that he is “not happy” with U.S. growth and said U.S. consumers are being cautious and intentional about their buying decisions. The company reported net income for the fiscal first quarter of $314 million, or $2.60 per share, compared with a net income of $321 million, or $2.54 per share, a year earlier. First-quarter revenue rose to $2.37 billion, up from about $2.21 billion during the same period in 2024.

Comparison to Wall Street Expectations

Here’s how the company did for its first quarter compared with what Wall Street was expecting for the quarter ended May 4:

• Earnings per share: $2.60 vs. $2.58 expected
• Revenue: $2.37 billion vs. $2.36 billion expected

Full-Year Guidance and Tariffs

The company cut its full-year earnings guidance. It expects its full-year earnings per share to be between $14.58 to $14.78. Previously, it expected full-year earnings per share to be in the range of $14.95 to $15.15 for the year. Analysts anticipated earnings per share of $14.89. Chief Financial Officer Meghan Frank added on the call that the brand is planning to take “strategic price increases, looking item by item across our assortment,” to mitigate the effect of tariffs.

Price Increases and Tariff Impacts

“It will be price increases on a small portion of our assortments, and they will be modest in nature,” she said, adding that those hikes will start rolling out toward the second half of the current quarter and into the third quarter. Lululemon’s report comes after a string of retailers reduced or withdrew their guidance and said they would hike prices because of uncertainty surrounding President Donald Trump’s tariff regime.

Market Reaction and Industry Comparison

Shares of the apparel company plunged about 23% in extended trading. Among Lululemon’s rivals in the athleticwear category specifically, Gap, which owns athleisure brand Athleta, reported last week that it expects tariffs to impact its business by $100 million to $150 million. Nike told CNBC last month it would begin raising prices on a wide range of products, though it did not specify whether tariffs were the reason for the hikes.

Outlook and Gross Margin

On Thursday’s earnings call, McDonald acknowledged the uncertainty that tariffs have brought on the business, but said he believes the brand is “better positioned than most” to navigate the current environment. Lululemon expects second-quarter revenue to total between $2.54 billion and $2.56 billion. It also anticipates full-year fiscal 2025 revenue to be $11.15 billion to $11.3 billion — unchanged from its last forecast. Gross margin was 58.3%, ahead of the 57.7% that analysts had expected.

Conclusion

In conclusion, Lululemon’s first-quarter earnings report showed a beat in earnings and revenue, but the company cut its full-year earnings guidance due to the impact of tariffs. The company plans to take strategic price increases to mitigate the effect of tariffs. The market reacted negatively to the news, with shares plunging 23% in extended trading.

FAQs

Q: What were Lululemon’s earnings per share for the first quarter?
A: $2.60 per share.
Q: What was Lululemon’s revenue for the first quarter?
A: $2.37 billion.
Q: Why did Lululemon cut its full-year earnings guidance?
A: Due to the impact of tariffs and a “dynamic macroenvironment”.
Q: What is Lululemon’s plan to mitigate the effect of tariffs?
A: The company plans to take strategic price increases on a small portion of its assortments.
Q: How did the market react to Lululemon’s earnings report?
A: Shares plunged 23% in extended trading.

In a sweeping move to combat the escalating issue of organized retail crime, law enforcement agencies across 28 states have arrested over 400 individuals in a coordinated crackdown. This operation, led by the Cook County State’s Attorney’s Office in Illinois, represents one of the most extensive efforts to date in addressing the surge of retail thefts impacting businesses nationwide.

A Unified Front Against Retail Theft

The crackdown involved collaboration between more than 100 law enforcement agencies and over 30 major retailers, including Target, Macy’s, Home Depot, Walgreens, and Kroger. Retailers played a crucial role by providing intelligence and support to law enforcement, with Ulta Beauty notably participating in nine states to share data on criminal activities.

Marty Maloney, director of media relations at Walgreens, emphasized the significance of this joint effort, stating that organized retail crime remains one of the most pressing challenges in the industry. During the operation, Walgreens collaborated closely with law enforcement partners across nearly 20 cities and at over 40 locations to address this growing concern.

The Growing Threat of Organized Retail Crime

Organized retail crime involves groups systematically stealing merchandise to resell it for profit. These operations have become increasingly sophisticated and widespread in recent years. A 2024 survey by the National Retail Federation (NRF) revealed a 93% increase in shoplifting incidents and a 90% rise … financial losses compared to 2019.

While the NRF previously claimed that organized retail … nearly half of the industry’s $94.5 billion in inventory losses in 2021 … it later retracted that assertion. Nonetheless, the impact of these crimes on retailers, employees, and consumers remains substantial.

Legal Reforms and Enforcement Measures

In response to the surge in retail theft, Cook County State’s Attorney Eileen O’Neill Burke has prioritized the prosecution of such crimes. Since taking office in December, she has implemented a policy to pursue felony charges for thefts exceeding $300 or involving repeat offenders, aligning with state law. This marks a significant shift from previous thresholds and underscores the county’s commitment to deterrence.

Sheriff Tom Dart of Cook County highlighted the deterrent effect of focused enforcement, noting that when criminals see that retail theft is being prosecuted seriously, it discourages such conduct. This approach aims to send a clear message that organized retail crime will not be tolerated.

The nationwide crackdown signifies a pivotal moment in the fight against organized retail crime. It demonstrates the effectiveness of collaborative efforts between law enforcement and the retail industry in addressing complex criminal networks.

However, experts caution that enforcement alone is insufficient. Comprehensive strategies, including stronger penalties for repeat offenders, enhanced surveillance, employee training, and continued collaboration between stakeholders, are essential to sustain progress.

As the retail sector continues to grapple with the challenges posed by organized theft, this operation serves as a model for future initiatives. By maintaining a united front and adapting to evolving criminal tactics, communities can work towards safer shopping environments and more resilient businesses.