White-Collar Workers Expected to Experience Layoffs
Jun 19 2020

White-Collar Workers Expected to Experience Layoffs

By: Caroline Hebert

According to Yahoo!Finance, billionaire bond investor Jeffrey Gundlach, the CEO of $135 billion DoubleLine Capital, has predicted that high-paid white-collar employees may encounter a wave of layoffs in the near future due to COVID-19.

"A lot of people don't have any savings—not enough savings. If a certain swath of the employment population has a significant layoff in the echo of the pandemic, which I think is coming, then they're probably going to be looking for a job, and there won't be many openings relative to the unemployment pool with that type of a skillset," said Matthew Klein of Barron's.

One consequence of the recent lockdown is "short term deflationary," which is the idea of real estate prices falling due to companies shifting to work-from-home permanently. This shift is also deflationary in the sense that if someone can perform the same job in a lower-cost city, you can lose your job for this simple reason. Klein believes that white-collar employees who have been laid off will end up taking pay cuts. He feels that if it's a choice between unemployment and a lower-paid position in their field, these white-collar workers are sure to choose gainful employment, even if it's now that much less gainful.

Gundlach remarked on another dynamic that is surfacing since the start of the pandemic. Due to remote working, those who produce during these times and those who don't is becoming more evident. At DoubleLine, he has noticed who is more responsive, and it seems to be to be the junior team members stepping up.

"I've talked to a lot of my peers on this—I kind of learned who was really doing the work and who was not really doing as much work as it looked like on paper that they might have been doing," Gundlach said. This is yet another factor that will make landing available jobs, which are already scarce, even more competitive.

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