July's jobs report sent a signal. The economy lost 23,000 jobs. Unemployment ticked down to 4.1 percent. May and June were revised down by a combined 103,000. The soft landing is looking more like a soft underbelly.
Etsy cut 12 percent of its workforce while announcing a $2 billion buyback. Rapid7 cut 12 percent while lowering revenue guidance. TikTok closed its Nashville office. Cloudflare cut 20 percent while posting record revenue. The pattern is consistent. Revenue up. Spending on AI up. Headcount flat or declining.
AI-driven restructuring has become the polite corporate synonym for "we over-hired, margins need protecting, and we want the stock narrative to stay future-facing."
July JOLTS: September 1. August jobs report: September 4. Those two prints decide if July was a blip or the trend.
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L. David OliverHost