Bosses talk about headcount like they did in financial crisis

For many traders and economists, a resilient jobs market is a sign that an expected economic slowdown this year will be shallow. Company bosses, on the other hand, appear to be questioning whether they have the right number of people for the looming downturn.

Mentions of “headcount” by executives on earnings and other calls reached the highest level last year since the global financial crisis, according to data compiled by Bloomberg News. Management at technology firms used the word the most, followed by industrials, the data show. 

So far this year there have been more than 570 mentions of headcount on calls, including Wells Fargo & Co. discussing cuts in its mortgage business and National Instruments Corp. targeting a 4% reduction in the first quarter.

Such warnings, and the large firings announced by Big Tech in recent weeks, are a sign that the labor market is unlikely to escape the impact of an economic slump. Staffing levels at some major technology firms are still 20% too big on average, according to Bank of America strategists. Activist investor TCI Fund Management Ltd. wrote to management at Alphabet Inc. last month to say they need to go further in their job cuts.

Reductions are spreading to other industries too, with Royal Philips NV announcing plans this week to cut another 6,000 jobs, or about 8% of its total workforce. Chemical maker Dow Inc. is reducing about 2,000 positions after energy expenses rose. –BLOOMBERG