Utah-based Traeger Pellet Grills will cut 14% of its global workforce, according to a recent earnings call — the most specific figure reported since the outdoor grill and meal kit company began laying off staff in July to cut costs.
The cuts come at a time when many employers in and out of the Beehive State are letting go of their workers, including Microsoft and Young Living Essential Oils — all pointing to lower revenue from reduced purchasing due to inflation, as well as ongoing supply chain issues amid the COVID-19 pandemic. Traeger has approximately 600 employees, according to the company’s LinkedIn page.
On the Wednesday earnings call, Traeger CEO Jeremy Andrus said grill sales were down 25% in the second quarter of this year compared to the same quarter last year. He said the company was taking decisive action because executives “are not satisfied with our near-term financial results.”
People are spending less on goods, such as grills and appliances, and more on experiences, hospitality and travel, Andrus said — though consumers are still spending less overall. That spending drop has been motivated, he said, by “elevated inflation and talk of a looming recession,” which has “weighed on consumer psychology.”
The Utah-based multilevel marketing company Young Living Essential Oils also is cutting jobs. According to a company statement shared with The Salt Lake Tribune, Young Living on Thursday “announced a reduction in force as part of a strategic restructuring to reduce operational costs.”
“The experience of a global pandemic, and everything that came along with it, has provided businesses the necessity to reevaluate ideal conditions for sustainable growth,” the statement said.
The layoffs will affect about 200 people across Young Living’s three facilities in Utah, which is under 9% of the company’s global workforce, according to a spokesperson for the company.
Young Living had a 2014 contract with the Governor’s Office of Economic Opportunity to create 445 jobs over a period of seven years. After the company proved that it had paid the salaries of its new employees, it would have been able to earn up to $8,753,974 million in tax rebates.
Traeger had two similar contracts. One in 2014, through which it could earn up to $503,537 in tax rebates after providing 164 jobs over seven years; and another in 2020, worth up to $882,430 after providing 120 jobs over seven years.
In July, Bloomberg also reported that Microsoft — which has at least three offices in Utah, according to the company’s website — said it would lay off less than 1% of its 180,000 employees. This week, the company announced a round of layoffs but did not specify how many positions would be affected.
But the apparent uptick in recent layoffs should not be taken out of context, said Catherine Ruetschlin, a labor economist at the University of Utah.
Layoffs ‘relatively rare still’
During the height of the pandemic, industries such as hospitality were suffering and heavily laying off staff, whereas tech companies whose services became essential to remote life grew.
Now, we are seeing a reversal of this trend, Ruetschlin said. People are going out to restaurants and traveling more, and tech companies are having to adapt to a slowdown of that unprecedented pandemic growth.
For example, Snap, Inc., owner of the social media and camera app Snapchat, recently announced layoffs, the Verge reported, though the company had grown its workforce during the pandemic. Snap grew from 3,195 employees in 2019, to 3,863 in 2020, to 5,661 in 2021, according to Macrotrends.
Microsoft’s profits continued to grow during the pandemic, The New York Times reported in July 2021. But now, like many employers, it is likely laying off workers to try to curb their growth to a sustainable rate, Ruetschlin said.
“We are in an unprecedentedly strong economy right now. And in fact, even though layoffs are news, they’re news because they’re relatively rare still,” she said.
The Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) keeps track of job departures including layoffs. Though the data’s publication lags a few months behind real-time, it shows that layoffs are low relative to historic averages.
Job layoffs and discharges in the private industry exploded across the country early in the pandemic, with more than 12.7 million workers laid off in March 2020 and more than 8.8 million laid off in April 2020, according to JOLTS data.
In May of this year, there were just over 1.3 million workers laid off — fewer than there were in May 2019 at nearly 1.7 million.
The annual rate of layoffs in Utah from May 2021 to May 2022 was 1.1%, not far off from the national average of 0.9%, according to a JOLTS data release.
The Federal Reserve raised interest rates in July to 2.4%, which Ruetschlin said “has made it very clear that they are going to move aggressively to slow down economic activity, which means they are actively attempting to reduce spending in the economy.”
It’s a “delicate job,” Ruetschlin said — trying to decelerate the economy enough to combat rapid inflation, while also avoiding an economic recession.
Leto Sapunar is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.