Trouble brewing at my company (potential layoffs) [View all]

Fortune 75 company that is struggling to contain costs with the tariffs. CEO on earnings call specifically cited tariffs and said we're responding by, "optimizing operations, leveraging existing programs and strategies, taking measures to control cost, and implementing pricing actions."

I think there's a bit of prudence with companies right now who are taking a wait and see approach while at the same time they're preparing layoffs should the tariffs remain in place more than a few months. This is pretty much automatic for companies, even ones that are killing it in revenue and profit. You hike material costs and there is no choice but to reduce costs. Companies don't have warehouses full of materials, it's a just in time world where they receive everything just before they need it for production. And the costs of tariffs are incurred at the ports, so it's not like they can account for this when they place an order, which might be weeks or months ago, this is an immediate expense just before receipt of goods. It's a shock to the cost structure for these companies. And these companies have long term deals in place with their customers at already agreed to prices, they can't just go back and renegotiate these deals at the drop of a hat.

So we're going very well right now, profits are up, we're hiring, paying big yearly bonuses, never been better here. I expect the first sign we are going into a different mode will be a hiring freeze. We'll see a hiring freeze in the next month IMO. Which is bad because we really need people to execute the contracts we have. After that, early retirements will be offered this Summer. Then layoffs shortly after that.

This is what tariffs mean, there's a direct relationship to them and layoffs. Companies have no choice, this is not something they could have planned for, it's a total shock to their cost structure. The overwhelming majority of companies who pay significant tariffs will be forced to layoff workers. My brother helps manage one of the largest die makers in the Midwest, they have already ended 3rd shift and they have yet to see their costs go up at all yet. You can't just throw a massive curve ball to corporations like this and expect them to adjust on the fly, regardless of whether business is booming or not.

Mass layoffs are coming, if the tariffs don't break soon, we're going to see unemployment rise quickly nationwide. And these layoffs are much more impact to regular people than stock prices are. When you are out of a job, your 401K is no longer growing anyways.