Investment in crisis vs. labor market situation

Technology companies are laying off several or several thousand employees at a time. In turn, retail chains, such as Kaufland and Lidl, have announced pay increases for employees and job growth - including in Poland. Unilever turns out to be the first global company - after New Zealand - to extend its 4-day work week to Australia. - The labor market situation has never been so dependent on companies' development and investment plans," stresses Radoslaw Jodko, an investment expert at RRJ Group.

As he stresses, for investors it is no longer important only the current result, and more and more the company's plan for development and a well-developed plan for the future, with the promise of future profits, begins to count.

"This significantly translates into companies' hiring strategies. This is best seen in the example of the big big tech companies, which, despite huge profits, are slowing down. Technology companies inspire the greatest confidence not in their performance here and now, but in their plans for the future. - What matters exceptionally in this industry is how the market is profiled, what the structure of the market may look like with the next steps. The market position changes exceptionally fast for many technology companies, so it is not the current result that matters, but the vision and plan for further profits," remarks Radoslaw Jodko, RRJ Group investment expert. 

Meta announced layoffs of 11,000 people, or 13 percent of its workforce, despite net profit of $4.4 billion in the last quarter. The layoffs have been forced, as it were, by investors who, as one shareholder, Altimeter Capital, pointed out, didn't like Metaverse's investments and the company's overstaffing.

Google's owner is also under pressure, because although revenues are growing, investors have pointed out that the cost per employee is too high, as the manager of TCI Fund Management wrote directly in a letter to the company. Google is said to be laying off 10,000 employees.

"This doesn't just apply to global companies. It is expected that many companies, if they have not yet announced layoffs, will do so soon. It's not always about deteriorating performance or economic weakness. Sometimes companies will have to look for arguments for being more flexible and show specific plans for the future. It's clear that every industry will be making layoffs, because as you can see from some of the announcements, companies are also investing in employees: in raises, but we're also seeing a huge trend where it's becoming increasingly important how long we work," notes Jodko.

It is in the 4-day work week that the expert sees one of the trends that will play a role in shaping companies' policies in 2023. - Regardless of the industry, great specialists, talent, but also employees who are available and identify with the company will still count. These will always be in demand in the labor market. On the other hand, companies have to find their way in a situation where the pressure from employees is no longer just about salary levels, but mainly about how long they work. The success of pilot programs where a 4-day workweek has been introduced best proves this. But it's also enough to listen to how, even in Polish companies, there is more resistance to mandatory return to offices than to layoffs, notes Jodko.

"So the more the strategy of companies begins to count, in which well-tailored plans mean promises of future profits for investors, not just flexible management here and now. Well, and I guess the role of corporations in the labor market will begin to grow, because they are the ones with not only the most stable employment, but also the right procedures and what we call, well-profiled corporate governance. It is the regulations, procedures and culture of the organization that can prove to be the best guarantor of security in these unstable times. In ESG strategies, too, this will become increasingly important, rather than just a strategy of actions leading to climate neutrality," concludes Radoslaw Jodko, RRJ Group investment expert.