U.S. job market divide boosts some workers’ prospects, puts others on

Cracks are forming in the U.S. labor market as some companies look to curb hiring while others are desperate for employees.

Microsoft, Twitter, Wayfair, Snap and Facebook-parent Meta recently announced they plan to be more conservative about adding new employees. Peloton and Netflix announced layoffs as demand for their products slowed, and online car seller Carvana cut its workforce as it faces inflation and a cratering stock price.

“We will treat hiring as a privilege and be deliberate about when and where we add headcount,” Uber boss Dara Khosrowshahi wrote to staff earlier this month, pledging to reduce costs.

U.S.-based employers reported more than 24,000 job cuts in April, up 14% from the month before and 6% higher than the same month last year, according to outplacement firm Challenger, Gray & Christmas.

But airlines, restaurants and others still need to fill positions. Job cuts for the first four months of the year were down 52% compared with the same period of 2021. Just under 80,000 jobs cuts were announced from January to April, the lowest tally in the nearly three decades the firm has been tracking the data.

What’s emerging is a tale of two job markets — albeit not equal in size or pay. Hospitality and other service sectors can’t hire enough workers to staff what’s expected to be a bustling summer rebound after two years of Covid obstacles. Tech and other large employers are warning they need to keep costs down and are putting employees on notice.

U.S. job openings soared to a seasonally adjusted 11.55 million at of the end of March, according to the latest available Labor Department report, a record for data that goes back to 2000. The numbers of employees who quit their jobs also hit a record, at more than 4.5 million. Hires stood at 6.7 million.

Wages are rising but not enough to keep pace with inflation. And people are changing where they spend their money, especially as household budgets tighten thanks to the highest consumer price increases in four decades.

Economists, employers, job seekers, investors and consumers are looking for signals on the economy’s direction, and are finding emerging divisions in the labor market. The divergence could mean a slowdown in wage growth, or hiring itself, and could eventually curtail consumer spending, which has been robust despite deteriorating consumer confidence.

Companies from airlines to restaurants large and small still can’t hire fast enough, which forces them to cut growth plans. Demand snapped back more quickly than expected after those companies shed workers during the pandemic-induced sales plunges.

JetBlue Airways, Delta Air Lines, Southwest Airlines and Alaska Airlines have scaled back growth plans, at least in part, because of staffing shortages. JetBlue said pilot attrition is running higher than normal and will likely continue.

“If your attrition rates…