Layoffs and the $1B hit to NC's economy

RALEIGH – Announcements of layoffs continue to occur, from companies both large and small. But another change to the state’s labor market is coming due to a growing number of firms that are deciding to back out of agreements made with the state, as Centene did last week.

The Fortune 50 healthcare company, which had planned a 3,200 employee east coast hub located in University City in Charlotte, has cancelled plans to invest $1 billion in the region, according to multiple reports published by the Charlotte Business Journal and other media outlets.

Good news for jobs seekers: Openings still growing on many Triangle hiring sites

‘Fundamental shift’

In a statement, the company said changing workforce needs played a key role in the decision:

“Since announcing our plans to establish an East Coast headquarters in Charlotte, North Carolina, there has been a fundamental shift in the way people want to work. Today, almost 90% of our workforce is working fully remote or in a hybrid work environment, and workplace flexibility is essential to attracting and retaining our top talent.”

The dropping of the investment does not right now mean the end to construction of the project, according to WBTV in Charlotte:

“Construction is still ongoing at the now former Centene Headquarters location in University City, and WBTV sources say that the company will complete that process. What the future of that property will be and whether it’s seen as an attraction by other corporations to come to Charlotte remains an unknown.”

That news came after the company announced a slashing of its real estate footprint on July 26:

“In June 2022, following a strategic review of the Company’s real estate portfolio and the adoption of a more modern, flexible work environment, Centene initiated a reduction of its real estate footprint and incurred a charge of $1.45 billion related to the impairment of leased and owned real estate and related fixed assets. Centene incurred impairments of $706 million related to owned real estate, $521 million related to leased real estate, and $223 million related to associated fixed assets. We anticipate additional future charges of approximately $200 million related to real estate optimization. This represents an approximate 70% decrease in domestic leased space and is expected to result in annualized leased expense savings of approximately $200 million.”

Robinhood slashing jobs in Charlotte – and shutting down the company’s office there

Not just Centene

That’s just the latest such decision that could change the state’s economic development metrics and its labor market. That’s because Centene’s decision follows a decision earlier in the month from Robinhood to lay off workers and permanently close its facility in Charlotte.

Microsoft, citing an unwillingness to share the requested employee hiring data, also asked to be released from an $20 million incentives agreement with the state of North Carolina earlier this year. Microsoft has two campus facilities, one in Charlotte, and one in the Triangle.

Sonic Automotive and Advance Auto Parts also requested to cancel deals that had previously been made with the state through the Economic Investment Committee.

However, 2022 is still proving to be a strong one for economic development with scores of projects and thousands of jobs still on track.

North Carolina’s Department of Commerce did not respond to a request for comment.

Layoffs also are still happening, too, as WRAL TechWire’s Layoff Watch shows.

Advance Auto Parts backs out of jobs incentives deal that brought HQ to Raleigh

Most recent companies making layoffs

Here’s what’s changed since the last WRAL TechWire Layoff Watch:

Aug. 22: NC TECH releases July 2022 IT Job Trends report, showing a significant drop in tech job openings month-over-month
Aug. 19: Wayfair making layoffs globally
Aug. 16: Centene reportedly cancelling investment plans for $1 billion campus in Charlotte

August layoffs

Aug. 14 – Arrival confirms to WRAL TechWire that the company has laid off 35 workers in Charlotte following a corporate restructuring impacting about 30% of global employees announced earlier this year.
Aug. 12 – Peloton announces additional job cuts, after laying off workers earlier this year
Aug. 11 – Layoffs announced in Johnston County and Pitt County, through the North Carolina Department of Commerce WARN report
Aug. 9 – GoHealth announces 800 layoffs, including 140 in the Charlotte area, a spokesperson confirmed to WRAL TechWire on August 16

Layoffs to hit 200+ workers in Johnston, Pitt Counties

Other August layoffs

Aug. 4 – Robinhood will make layoffs of 23% of its workforce, a few months after slashing 9% of workers. This includes laying off 82 workers in Charlotte and closing the company’s office facility there, at which it had promised to hire nearly 400 workers not more than 18 months ago
Aug. 4 – Walmart will cut 200 corporate jobs, according to a CNN report
Aug. 4 – Jobless benefit applications are again on the rise, according to the U.S. Labor Department, which is a sign that more layoffs are occurring
Aug. 2 – Job openings have plummeted since the last monthly survey, according to the data from the Bureau of Labor Statistics, the lowest since September 2021
Aug. 1 – Oracle reportedly to lay off thousands of workers

Layoffs alert: Cargo services firm in Charlotte cutting 154 workers

Layoffs announced in July

July 29 – Cargo services firm in Charlotte cutting 154 workers
July 27 – The latest survey results from NC TECH show that 1.6% of surveyed companies have laid off, considered making layoffs, or furloughed workers, and another 17.5% have already implemented a hiring freeze.
July 27 – Automaker Rivian will lay off about 6% of its workforce, the founder and CEO sent in an email to employees (TechCrunch report.)
July 26 – Layoffs at Shopify, with approximately 10% of global workforce slashed

Layoffs still keep coming despite better-than-expected jobs report

Other reports

More on layoffs announced earlier this year:

Invitae announced it planned to lay off as many as 1,000 workers globally and Arrival, with a North American headquarters in Charlotte, announced it could cut 30% of its staff in the coming months. They’ll be making additional announcements in the coming weeks.
Microsoft, which as recently as last month, told WRAL TechWire that it was hiring for hundreds of positions locally in the Triangle, has now also announced that it will cut hundreds of jobs. The firm is still hiring in North Carolina, according to the latest WRAL TechWire Jobs Report, though it does shows a drop off in the number of openings locally at the firm compared to earlier this year.
Peloton, which had something of its own pandemic boom and bought a North Carolina company previously, announced it would no longer manufacture its own stationary exercise bicycles, and would lay off some 600 workers. (Editor’s Note: This was the first announcement from Peloton; the second announcement came last week.)
And Biogen, which has a big presence in RTP, announced layoffs in a move to reduce costs last month, as well.
Last month, technology startup Adwerx announced it would lay off 40 workers, citing “macroeconomic uncertainty.”