Speaker 1: On LinkedIn last year, we saw that about 1 in 7 jobs were remote, and now that's down to about 1 in 11.

Speaker 2: The laptop class is living in la-la land. It's messed up to assume that they have to go to work, but you don't.

Speaker 3: Quiet cutting done right is a great way for employers to have that employee engagement, employee satisfaction. If the quiet cutting is done the wrong way, it impacts the reputations for employers as well.

Speaker 4: The biggest market is the labor market. You know, if you look at what employers do, where their budget is, it's mainly going to labor.

Speaker 5: Employers are hesitant to lay off workers because of their recent experience with labor shortages. So there aren't as many of those opportunities for folks who are trying to break into those roles.

Speaker 6: On paper, the job market now looks solid. Unemployment hit a 54-year low at 3.4 percent back in January of 2023. And U.S. employers added 2.7 million people to the payroll in 2023 alone. The January jobs report also showed the 2024 labor market was off to a solid start.

Speaker 5: When we look at the hard data, it seems to suggest that the labor market has been fairly strong and in fact, surprisingly resilient, especially after 2023, where we had headlines about layoffs and forecasts of recession. But when you look at the soft data, Americans tend to be a little bit less optimistic about how the economy is doing it, in particular about the job market.

Speaker 7: Politicians just talking about how the economy is so great. I just want to scream from the rooftops. Then how come no one can find a job?

Speaker 6: Recently, unemployed full-time workers applied to an average of 30 jobs, only to receive an average of four callbacks or responses.

Speaker 4: If you look at the job vacancies, they're down a little bit, but not down enormously. But if you ask, you know, how hard are you working to fill them? The answer seems to be not very right now.

Speaker 6: So why does it feel so hard to get a job right now? And is the U.S. labor market as strong as it seems?

Speaker 7: Hi, my name is Jenna Jackson. I'm from Ardmore, Pennsylvania, in the suburbs of Philadelphia. This job market is like the craziest that I have ever seen. I was frustrated just with how my job search process has been going. I haven't quantified how many applications I've applied to. It would be a little depressing, I feel, at this point to quantify it. But I was definitely in the hundreds at least.

Speaker 6: Fifty-five percent of unemployed adults said they were burnt out from searching for a new job. Younger generations were impacted the most, with 66 percent complaining of burnout stemming from job search.

Speaker 8: Looking for a job can be a full-time job. There's a lot that goes into it. Filling out applications online can be tedious and can be time-consuming and can be really stressful.

Speaker 7: Every day just feels like Groundhog Day. You're waking up, doing the same thing.

Speaker 4: When I looked at the data, if you just applied to a job through a job board, the odds of you getting hired were about 3 percent. So you've got to apply to a lot of different jobs in order to have a chance to get them. And you're going to get lots and lots of just no responses. And it's exhausting if you do that.

Speaker 6: A 2023 study from Glassdoor revealed that mentions of applicants being ghosted by their prospective employers grew substantially since before the COVID-19 pandemic.

Speaker 5: We often hear from job seekers that they send out tons and tons of applications and they don't even hear back. And that can be very emotionally and mentally taxing.

Speaker 7: It's unprofessional as well. Especially if you're going to take the time to do an interview with them, you can at least let them know.

Speaker 8: I think it's because of technology. It's easy to put up a job and so many people can see that job. So when you get such an overwhelming response, it's often very difficult to get back to every single solitary candidate. Certainly during the great resignation when the market was at a fever pitch, companies were being ghosted by candidates, which is something that hadn't happened as much in the past. So we've seen it happen on both sides of the fence. And I think a lot of it is caused by just sheer volume.

Speaker 6: The time it takes for a company to hire an employee also hit an all-time high at an average of 44 days during the first quarter of 2023. With some industries like the energy and defense sector taking more than 67 days for hire.

Speaker 7: The application process has been getting longer and longer with going through multiple rounds and doing assessments. My worst experience so far was with a large financial institution where I had a phone screen with them. And I also had a Zoom interview with one of the team members. After that, I had a case study where I was given very vague instructions. They got back to me and said that the team didn't feel like there was enough. They gave me another attempt. In the end, I just ended up just going back to the recruiter and saying, like, you know, I'm sorry, I don't think this is the best fit. Because even if I did move forward and they were OK with my revision, there still would have been three more interviews.

Speaker 4: A lot of employers think that doing more interviews is a good thing. And it's not a good thing. Most job interviews are not doing anything important. They don't know that the questions they're asking are going to reveal anything about whether you are a good candidate or not. They don't know when they ask the question what the right answer is. And this is a development that's been going on for a while. It's not a good thing for anybody. And even if the labor market was stronger, you would still be seeing some of this.

Speaker 6: There are generally two terms economists use to describe the state of the job market. Tight and loose.

Speaker 5: Usually when economists talk about a tight labor market, they mean hot, essentially. And mostly what that means is it is difficult for employers to find workers. And so in that context, employers tend to be more hesitant to lay off workers. They tend to try to be more aggressive about how they hire, whether that means offering bonuses or offering on the job training. By contrast, a loose labor market or cold labor market is one where there might be layoffs. It might be hiring freezes. It might be difficult to find a job for workers who are either already in the workforce or workers who are trying to enter the workforce for the first time.

Speaker 6: The American labor market has remained extremely tight following the end of the pandemic.

Speaker 8: So many companies had to scale back during the pandemic. And then all at once, companies were able to hire again as their businesses started to move. So you had so many job openings happening all at the same time.

Speaker 6: Job openings surged to historic highs, while the country continued to struggle from a devastating labor shortage. With so many plentiful job prospects, even working Americans quit their jobs at a record pace for new jobs, in a trend that came to be known as the Great Resignation. But the job market is beginning to show signs of cooling.

Speaker 4: There's less of a frenzy on the part of the employers. If you're somebody who wants a job, you would like a frenzy on the part of the employers because you would like to have lots of people trying to hire you.

Speaker 5: I think one interesting thing about the job market right now is that it is strong, but the hiring rate is low and similarly, the layoff rate is actually very low.

Speaker 6: The layoff and discharge rate in the U.S. has been hovering near historic lows, despite the barrage of layoffs reported specifically within the more visible tech and media sectors.

Speaker 5: I think what might be going on here is that employers are hesitant to lay off workers. They're hesitant to push workers out because of their recent experience with labor shortages. But on the flip side, that also means that a lot of workers are sitting tight. They're not quitting. They're not being laid off. And so there aren't as many of those opportunities you would normally expect from attrition for folks who are trying to break into those roles.

Speaker 6: Meanwhile, research from LinkedIn found that job seekers search intensity in the U.S. grew by 27 percent in 2023 compared to the year before. In 2022, there was one open job for every active applicant on the LinkedIn platform. By 2023, the ratio turned to one job for every two active applicants.

Speaker 8: Right now in the marketplace, what we're seeing is both employers and employees being a little bit more selective. Everybody's taking a little bit more of a measured approach right now, being a little bit more selective in their choices. And that's why we've seen a little bit of a cooling in the marketplace.

Speaker 6: However, experts reassure that the cooling labor market is no reason for concern yet.

Speaker 4: It is important to have a perspective that's a little more historical on this. You know, if you're hunting for a job right now and you can't find one, it looks like a lousy job market to you. But compared to your parents' experience, it's a great job market.

Speaker 5: I think that sentiment is outcomes minus expectations. So in 2021, 2022, there were labor shortages. Companies were hiring very aggressively. And so even if 2024 is shaping up to be a relatively healthy labor market, by recent comparison, it doesn't feel quite as strong.

Speaker 6: A cool down in the labor market was also what the Federal Reserve had intended with its series of interest rate hikes.

Speaker 4: If you are the Federal Reserve and you want to slow the economy down, that means you want to slow the markets down a bit. The biggest market is the labor market. You know, if you look at what employers do, where their budget is, it's mainly going to labor. So you can't easily cool the economy down unless you cool the labor market down.

Speaker 6: Experts also noted that the health of the labor market will largely rely on where the economy is headed next.

Speaker 5: If the economy does slow down more significantly in 2024, if we see a recession in 2024, the labor market can be somewhat resilient, but it can't fully buck the broader economic trends. And so that's definitely something we want to watch out for in 2024. It's not a guarantee that the job market is going to remain as strong. Broadly speaking, we might have some optimism about the economy. That doesn't necessarily mean that the job search is an easy process.

Speaker 4: I guess the big thing I would say is it's not you. You know, it's not you. It's happening to thousands of other, hundreds of thousands of people at the same time. And it has to do with what's going on in the bigger economy. It has to do with uncertainty. But it also has to do with a lot of quirkiness inside employers about how they handle hiring these days.

Speaker 7: It's definitely difficult out there, but, you know, I just encourage you not to give up and still keep diving into your network and stay tight with family and friends just to give you the emotional support that you might be lacking at the moment and to give you that confidence that you can do it.

Speaker 9: This is how corporate America feels about remote work in 2023.

Speaker 2: The laptop class is living in la-la land. It's messed up to assume that they have to go to work, but you don't. It's not just a productivity thing. I think it's morally wrong.

Speaker 10: Listen, it doesn't work for young kids. It doesn't work for spontaneity. It doesn't really work for management.

Speaker 9: And this is how the corporate world felt about remote work in 2020 during the height of COVID-19.

Speaker 11: The biggest advantages, I think, are access to large pools of talent who don't live around the big cities and aren't willing to move there.

Speaker 12: Since we've all been forced into being remote now for nine months, I think we've realized that if you have somebody in a particular location who's willing to work the hours to be able to collaborate, you can do it very effectively. So it's changed how we thought about hiring.

Speaker 9: Let's pause here. Notice something? In fewer than three years, corporate leaders have reversed their approach to remote work, and it seems like this tactic has been working. The latest data from the Census Bureau found that fewer than 26% of U.S. households still have someone working from home. That's down from 37% in early 2021.

Speaker 13: So the reason we're having this entire conversation about remote work dying is, first of all, because we kept thinking that we were going to bounce back to quote-unquote normal. When the pandemic started and we had people working from home, the idea was this is very temporary and we were all going to come back.

Speaker 1: So really what's changed the discussion about remote work is the slowdown in the labor market. There are a lot of employers out there who had suspicions about remote work from the start, and you can see that kind of by the timing of when people actually went to being remote during the start of the pandemic. So the concerns that employers had about remote work were present all during the Great Reshuffle, but they didn't really have much of a choice. But with the emergency orders expiring for the pandemic this year, now they can actually start to bring people back and address some of those concerns that they might have about productivity.

Speaker 14: Remote work was thrust upon us basically by the pandemic. Before the pandemic, remote work was pretty rare, so about 5% of days. We were forced to work from home. All managers and professionals were basically fully remote for much of 2020. And then it turned out it's worked really well.

Speaker 13: Such as no commute, working in your sweatpants, doing your laundry between Zoom calls, but also just the savings in terms of time, in terms of money, in terms of your commute, in terms of being able to spend more time with your children or pick them up from school.

Speaker 15: People quickly found ways to be productive, to continue communications together and to keep collaborating together in whatever tools they could invest in to support that work and that teamwork.

Speaker 9: As the world slowly started to open up, corporate America began to change its tune on remote work, so much so that some firms now even threaten to fire their employees if they don't show up at work.

Speaker 16: Zoom, the company this is, now throwing in the towel on fully remote work.

Speaker 9: Even Zoom, the video conferencing company that helped make the remote work boom happen in the first place, is also taking a hard line on return to office.

Speaker 1: So some of the pushback remote work is driven by concerns about productivity. There have been some experimental studies that show that there's some productivity impact, potentially, from remote work. But those studies are also experiments, right? It's unclear how they apply to the broader labor force. The United States does have a productivity problem.

Speaker 9: Before the second quarter of this year, the country had experienced five consecutive quarters of year-over-year declines in worker productivity. In fact, a major study that Professor Nicholas Bloom co-authored found that fully remote work led to productivity declines of about 10 to 20 percent when compared to fully in-person work.

Speaker 14: Now the other important thing in the study is we pointed out, look, what firms care about ultimately is profitability. And it turns out that if you have an employee that's remote, you also save a lot of costs. So you're saving about 10 percent less overhead because you don't have an office. And then you can hire these folks, maybe nationally or internationally, maybe save another 20, 30, 40 percent. Remote workers, they may be 5, 10 percent less productive, but they are so much cheaper that it's profitable for firms to have many teams, many employees remote.

Speaker 3: If you're coming with the stat to protect yourself, to put the positive narrative for people to return to work, I'd like to think what were the productivity like when people were all working from home, when you're not allowed to have any face-to-face worker at all, right? So now you're spinning it in your favor. So I'd like to challenge that.

Speaker 17: If the employee can perform their duties and handle their responsibilities, they should be encouraged to work from wherever it makes them feel as excited about life as possible. I camped in Key West for three weeks. I was in North Dakota in February. I've been up and down the coast of California. I've been to our national parks. For me, that's where I feel best working, and that's where I've gotten my best work done. I believe we can work from anywhere.

Speaker 18: My name is Susan Perazoli. I used to work for JP Morgan and Chase. It was all remote, but once they changed their policy to come to office, that was in Plano, Texas, but I live in California, so I decided not to move out there because of my kids. I have two school-going kids. I have to manage work-life balance as well. That was the reason why I quit my job. JP Morgan had given me 45 days of time frame to find another job, and I applied for some other companies and found a remote job with Leidos. So I have been working remotely with Leidos as a senior system analyst.

Speaker 9: Perazoli is not alone in his choice to quit rather than return to an office setting. Finding a fully remote job, though, is getting more challenging. New research from Indeed found that job postings are declining faster in metropolitan areas where many jobs can be done remotely. A similar trend is playing out on LinkedIn as well.

Speaker 1: So on LinkedIn last year, we saw that about one in seven jobs were remote, and now that's down to about one in 11. But over this time, we've also seen an inversion. Now we see about one in seven jobs being hybrid, coming up from one in 11 last year. So we're seeing more folks coming back into the office, but they are not coming back into the office five days a week.

Speaker 15: Many employers are strong-arming their team members and that they would love remote work to die faster. As a result, I do see that remote work is, quote-unquote, slowly dying and becoming more competitive to get.

Speaker 9: The pandemic-induced shift to remote work has raised concerns about the future of commercial real estate, especially office spaces. The latest report from McKinsey Global Institute suggests that remote work threatens to erase $800 billion from the value of office real estate in nine major cities around the world. Other experts say the empty offices created by remote work in various cities are also leading to what's been called the, quote, urban doom loop.

Speaker 19: The problem does start with the office demand, right? And we've seen with the advent of remote work and hybrid work and dramatic reduction in office demand over these past three years, that has led to rising vacancy rates and, in fact, to all-time high vacancy rates in the office market right now. And that does put downward pressure on the valuations of these offices. You mentioned that they're down probably 20%, 30% already. They're likely to fall by more. And that causes downward pressure on property tax revenues because for a lot of cities, office tax revenues is a big chunk of their tax revenues, often as much as 50%. Some of that is coming from office, maybe 20%. So maybe 10% of overall tax revenues for cities comes from office. If those offices lose about half of their value, tax revenues fall, and that creates a huge hole in the budget.

Speaker 1: So like everything, there are going to be winners and losers as we transition to a world where we have remote work as a permanent feature. One of the potential losers is commercial real estate, in part because offices aren't needed as much or they're not needed at all. So commercial real estate may be a loser for remote work. We may also be concerned about businesses that support workers who come to the office. So think about your food trucks, your laundry services, all of these businesses that are centered around folks coming into the office five days a week. They may face difficulties when that's not happening as much.

Speaker 13: Commercial real estate is problematic in a number of big cities, but there are a lot of people now who are saying that we need to bring people back to the office because our commercial buildings are empty, which is a little bit like saying we need to have people use the horse and buggy because cars are going to wipe out that industry. We have to understand that the world has changed, our ways of working have changed, and we can't go back to an old, outdated way simply because we are being motivated by commercial real estate. Commercial real estate needs to rethink. We've already seen in some cities that it's being converted, it's being used for other purposes, some of it's being converted into residential housing, and we're going to have to get much more creative about what to do with those empty buildings.

Speaker 20: If you're pushing your employees to come back to the office, you've got to make sure that they're coming back to the office for something other than meals.

Speaker 13: I don't think we ever will bounce back to those pre-pandemic days. What I do think we will see, and we are already seeing, is that there is a benefit to also being in person, and that's why we're seeing companies first saying come back one day a week, two days a week, three days a week, maybe four days a week even. But I do think that the old school five days a week, 40 hours on the premises, I do think that's dead. I don't think it's coming back.

Speaker 18: I'm a family person, and most importantly, I can save multiple hours by working from home, by saving commute hours, and which I can give to my family. I can give those hours for myself, which has been benefiting a lot. And I always pick what to do remotely.

Speaker 14: Work from home is here to stay. If you're concerned about it, the best thing to do is figure out how to make it work because it's definitely not going away.

Speaker 13: Hey, so I have good and bad news. Which do you want to hear first? What's the bad news? Your current role has been eliminated.

Speaker 9: Okay, what's the good news?

Speaker 8: You're being reassigned.

Speaker 9: This is an example of quiet cutting, a new workplace trend that's been dominating the headlines. We've talked about quiet quitting. Now there's a new trend, quiet cutting. A new trend is here, quiet cutting.

Speaker 16: Some bosses have been trying out a new technique called quiet cutting.

Speaker 3: Quiet cutting is restructuring and reassigning the roles and responsibilities for a completely different thing by not giving them layoff and portraying like, we have something for you, we'll take care of you. Here is the job, take it or leave it. And that basically is avoiding layoff in certain scenario by the employer to employee.

Speaker 13: For the past few years, we have seen quiet quitting. We've seen the great resignation. And all of this was a sign of a strong economy, a strong labor market, tight, tight labor market. Employees have had the upper hand. Quiet cutting is a suggestion that the tables are starting to turn, that employers are starting to have that upper hand now.

Speaker 15: Quiet cutting is just a buzzword term, but reorgs, when a company reorganizes their internal system and teams, is not new, it's not a new concept. And reorgs have historically either been made to benefit the company, but have historically always frustrated employees. It is being highlighted as a different aspect of the mass layoffs and changes in the field of work that we're seeing.

Speaker 9: This is Matt Conrad. He's been reassigned twice at IBM. He ended up with a job he loves, but the reassignment process took a toll.

Speaker 17: Yeah, so I was actually reassigned, I think, twice in 366 days. And unfortunately, I live with mental health disabilities and major depression, complex PTSD and anxiety disorder. And all three kind of kicked in simultaneously. And I started having panic attacks on really a twice a day basis and ended up taking short term disability to make sure I protected my mental health.

Speaker 9: IBM isn't alone in having employees reassigned to new roles. Big name companies like Adidas, Adobe and Salesforce have been enforcing large scale reassignments. Also, LinkedIn research published in May found that hiring has continued to slow in many countries, but internal mobility is trending upwards in several industries. Some economists say that despite the overall U.S. job market remaining strong, companies are fearful of what lies ahead, so they're resorting to the quiet cutting tactic.

Speaker 13: You know, quiet cutting is happening because companies are fearful of what's coming down the pipe. They're fearful that the economy will go into recession or that they will run into economic headwinds and they are concerned that they're going to have to cut down the line. And so this is a little bit of insurance for them. The other thing it does is it potentially saves employers money, because if you have to do a major layoff, then you have to pay severance. There's all sorts of other financial issues that come into play that will cost you money. So this is sort of a way to have some savings and hopefully get rid of some employees. It's really unfortunate. It does not reflect well on the companies and it really is very harmful to employee morale.

Speaker 1: So one of the things that typically happens during business cycles is this process that economists refer to as creative destruction. So as we figure out what the next step is, when you see demand slowing down, what's the new product you're going to release? You want to create, but then in order to create, you need to cut costs, and that's part of the destruction. So really businesses are trying to optimize for the future and that results in these things that we call reorganizations that are often being referred to as quiet cutting.

Speaker 3: Quiet cutting done right is a great way for employers to have that employee engagement, employee satisfaction. But if the quiet cutting is done the wrong way, it impacts the mental health, it impacts the employee engagement, it impacts the reputation for employers as well. So they really have to think it through if the quiet cutting is the right approach to go by right now or maybe lay off it is because they really have to think it off if it's the right approach.

Speaker 17: For me, what I learned is you have to go through the process of grieving, of being angry, of loss, and then see what doors will open up, see what windows will open up. I never would have thought I would have ended up on this team. I never would have thought I would work for a manager who really has my back and supports me. And now both those statements are true. I love what I do and I love who I work for. I would encourage all employers to consider the pros and cons and if anything else can or should be done. Perhaps, you know, giving an employee an option between two roles if that's a possibility or even saying, hey, would you like a severance package of some sort or would you like to be reassigned? Just giving employees some say in the process, I think, would make them feel more comfortable about the whole thing. Thank you.