Has the decline of knowledge work begun?

Boston.com: “The unemployment rate for college graduates has risen faster than for other workers over the past few years. How worried should they be? When Starbucks announced last month that it was laying off more than 1,000 corporate employees, it highlighted a disturbing trend for white-collar workers: Over the past few years, they have seen a steeper rise in unemployment than other groups, and slower wage growth. It also added fuel to a debate that has preoccupied economists for much of that time: Are the recent job losses merely a temporary development? Or do they signal something more ominous and irreversible? After sitting below 4% for more than two years, the overall unemployment rate has topped that threshold since May. Economists say that the job market remains strong by historical standards and that much of the recent weakening appears connected to the economic impact of the pandemic. Companies hired aggressively amid surging demand, then shifted to layoffs once the Federal Reserve began raising interest rates. Many of these companies have sought to make their operations leaner under pressure from investors. But amid rapid advances in artificial intelligence and President Donald Trump’s targeting of federal agencies, which disproportionately support white-collar jobs, some wonder if a permanent decline for knowledge work has begun. “We’re seeing a meaningful transition in the way work is done in the white-collar world,” said Carl Tannenbaum, the chief economist of Northern Trust. “I tell people a wave is coming.” To date, few industries epitomize the shift of the last few years better than the making of video games, which began a boom in 2020 as couch-bound Americans sought out new forms of home entertainment. The industry hired aggressively before reversing course and embarking on a period of layoffs. Thousands of video game workers lost jobs last year and the year before. The scale of the job loss was such that the host of the Game Developers Choice Awards, the industry’s annual awards show, complained about “record layoffs” during her opening monologue in 2024. That same year, a unionization trend that had begun with lower-paid quality assurance testers spread to better-paid workers like game producers, designers and engineers at companies that make the hit games Fallout and World of Warcraft. At Bethesda Game Studios, which is owned by Microsoft and makes Fallout, workers said they unionized partly because they were alarmed by rounds of layoffs at the company in 2023 and 2024 and felt that a union would give them leverage in a softening labor market. “It was the first time that Bethesda had experienced layoffs in a very, very long time,” said Taylor Welling, a producer at the studio, who holds a master’s degree in interactive entertainment. “That sort of scared a lot of people.” Microsoft declined to comment.

Unemployment in finance and related industries, while still low, increased by about a quarter from 2022 to 2024, as rising interest rates slowed demand for mortgages and companies sought to become leaner. On an earnings call last summer, the CEO of Wells Fargo noted that the company’s “efficiency initiatives” had pruned the company’s workforce for 16 straight quarters, including a nearly 50% reduction of workers in the company’s home lending division since 2023. Last fall, Wells Fargo laid off about one-quarter of the roughly 45 employees on its conduct management intake team, which reviews accusations of company misconduct against customers and employees. Heather Rolfes, a lawyer who was let go, said that she believed the company was seeking to save money by shrinking its U.S. workforce and that she and her colleagues were a tempting target because they had recently sought to unionize. “I think it was great for them to get rid of two birds with one stone,” Rolfes said. Some of her former co-workers say they anxiously await every Tuesday after a payday, because that’s when the company tends to inform workers about job cuts. “We feel like at any moment we could be laid off,” said Eden Davis, another worker on the team…”