The situation: White-collar employment at US public companies has dropped 3.5% over the past three years, per Live Data Technologies data cited by The Wall Street Journal. The trend comes as companies face mounting pressure to cut overhead amid economic uncertainty—prompting executives to increasingly turn to automation to boost efficiency.

Several major employers have recently announced layoffs, including:

• Procter & Gamble is cutting around 7,000 jobs, or roughly 15% of its global nonmanufacturing workforce, as part of a broader strategy to exit underperforming categories and divest smaller brands.
• Estée Lauder is also laying off up to 7,000 employees as part of a broader turnaround plan.
• Microsoft plans to cut thousands of workers on the heels of last month’s layoff of 6,000 employees, per Bloomberg.

More reductions may be coming: 41% of CEOs expect to reduce headcount over the next six months, a considerable jump from 29% in Q1, per Business Roundtable’s Q2 2025 CEO Economic Outlook Survey.

Doing more with less: While economic pessimism is the primary driver behind many of those likely job cuts—CEO sentiment dropped 15 points in Q2 to its lowest level since 2020—executives have also grown increasingly vocal about how generative AI will reshape white-collar employment.

• Amazon CEO Andy Jassy on Tuesday sent a memo to employees that AI will deliver "efficiency gains" enabling workforce reductions.
• Lowe’s CEO Marvin Ellison echoed that sentiment the same day, warning that corporate jobs are more at risk than frontline roles as AI adoption accelerates, per Business Insider.

Why it matters: The shrinking white-collar workforce will likely create ripple effects across the broader US economy—particularly in the retail sector, where discretionary spending is already under pressure.

• Consumer sentiment remains fragile. While consumer sentiment improved in June, it’s still about 20% below its December 2024 level, per the University of Michigan. That unease extends to affluent consumers as well: Just 28% of luxury shoppers feel optimistic about the economy—a sharp 13-point drop since January, per the Saks Global Luxury Pulse.
• That growing pessimism is translating into softened spending intent. Only 47% of luxury consumers plan to spend the same or more on luxury goods over the next three months—an 11-point drop since January and the lowest level since tracking began in April 2023.

Our take: White-collar job cuts, combined with rising tariffs and broader macroeconomic uncertainty, are creating an increasingly challenging environment for retailers heading into the second half of 2025—and likely beyond.