As people debate today’s job openings and ahead of tomorrow’s ADP report and Friday’s BLS figure, I’m going to quote again what the CEO of ZipRecruiter said in their shareholder letter and quarterly call on May 10th. They seem to have been forgotten.
In their Q1 quarterly shareholder letter CEO Ian Siegel said “The macroeconomic environment is highly uncertain. Our prior guidance assumed that softness in demand observed in January created a lower starting point from which a more normal seasonal pattern would reassert itself. Contrary to that assumption, in Q2 ’23, we have seen demand for recruiting services continue to decline. Job postings have decreased across the majority of industries and across companies of all sizes. Both SMBs (small and medium sized businesses) and enterprises are spending less to make hires in spite of heading into what is historically the hiring season. This means we are no longer following the standard seasonal job market pattern ZipRecruiter has tracked over the company’s 13 yr history, excluding the Covid pandemic period.”
On the earnings call, “On conversations with our customers, we see employers paring back their hiring in response to the uncertain economic backdrop we now face. Because of these trends which are unlike anything we’ve seen in our 13 years of doing business, we are not providing full year revenue guidance.”
“While Q1 ’23 revenue was down 19% y/o/y, revenue in April was down 27% y/o/y. This is reflective of a contraction in demand with both SMBs and enterprises continuing to reduce the number of jobs they post and the amount they spent for job advertising.” To this point, Siegel said “there has been an acceleration of the deceleration in the demand for recruiting services.”
I’ll finish with these comments from Siegel, “This is very clearly a macroeconomic phenomenon. This downturn is affecting a multitude of players in our industry. And just last week we had an enterprise summit where I spoke to 30 of the largest hires in America. These are companies that hire between thousands and 10s of thousands of employees per year. Across the board, all of them have reduced their hiring plans in the face of the economic uncertainty their businesses face.”
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.