Retailers Cut Back Seasonal Jobs Amid Inflation, Tight Labor Market

  • Retailers like Walmart and Macy’s are cutting seasonal jobs compared to 2021.
  • Inflation and a tight labor market could be responsible for the decline in hiring.
  • But some retailers have also learned from periods of overstaffing during the pandemic.

Last year, up to 665,000 people turned to seasonal retail jobs during the holiday season. They may find it harder to find an open position this year.

Walmart, Macy’s, Michael’s, Dick’s Sporting Goods and Target announced their hiring plans in the last week, and nearly all are reducing short-term hiring compared to last year:

  • Walmart said this month it plans to hire 40,000 workers for the upcoming holiday season, a drastic shift from 2020 and 2021, when it set a goal of 150,000 workers to hire vacation workers
  • Macy’s will also reduce seasonal hires this year. The department store chain announced plans to hire 41,000 seasonal workers, up from 76,000 in 2021
  • Michael’s craft shop aims to fill 15,000 seasonal jobs this year, down 5,000 from last year
  • Dick’s Sporting Goods is also reducing vacancies by 10% this year compared to 2021.
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Target appears to be the only major retailer bucking the trend: It’s looking to hire 100,000 seasonal workers this year, the same number it had last holiday season.

Perhaps the truest predictor of summer jobs will be Amazon, which added 150,000 seasonal jobs last year. A company spokesman told Insider it’s too early to say anything about his vacation plans for 2022.

Why are there fewer seasonal jobs this year?

For one thing, the unemployment rate is low, with job vacancies outstripping the available labor force by a ratio of 2 to 1. Companies looking to hire part-time workers may have an especially tough time, Matthew Lavery, director of talent acquisition at UPS, recently told the Marketplace radio show.

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“I mean, in the hourly range, people aren’t just applying for our job, they’re applying for 10 jobs,” he said. “There’s competition, and I think in some cases they’re buying in.”

For some retailers, the adjustments to seasonal hiring schedules could be the result of lessons learned during the pandemic. During Walmart’s quarterly earnings call in May, CEO Doug McMillon said the company shut down in late 2021 as the Omicron variant spread through Walmart’s workforce, only to be saddled with “weeks of overstaffing” that hurt the company’s earnings company. Amazon pointed to a similar problem with overstaffing after the holidays, an issue that could set the tone for this year’s holiday hiring season.

But inflation could also be to blame for the scaled back hiring plans. Months of sky-high inflation have taken their toll on consumer spending and prompted some retailers to brace for a lackluster holiday shopping season.

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Retailers have already highlighted changes in customer behavior, including switching to cheaper brands and making more purchases on credit cards — and they’re taking longer to pay off. In an August survey of 2,200 American adults by Morning Consult, 77% said they were shopping less overall, while 60% said they were delaying larger purchases.

These shifts are expected to feed into the normally busy holiday shopping season. Recent forecasts from Bain & Co. showed that while sales rose 13.2% during the 2021 holiday season, they are expected to grow just 7.5% this year and only 1% to 3% when adjusted for inflation. During the recent spate of quarterly earnings, several companies adjusted their forecasts for the remainder of the year, bracing for lower sales and earnings, even over the holiday period.