From CNBC:

Corporate America is taking a serious approach to cutting costs this year, including layoffs and store closures. Executives want to show shareholders they’re adjusting to consumer demand and countering higher expenses, as consumer spending returns to typical patterns or softens. Companies are seeking to cut expenses and increase profits due to higher costs.

Many companies are slashing jobs and expenses in efforts to drive up profits without the support of big price increases and sales growth. Others are delaying or reducing investments in new projects, vehicles, and robots, as well as cutting costs in processes and resources, such as food waste reduction. Executives are looking for ways to manage the budget to counteract higher prices. Income and sales have both decreased, and companies are seeking to reduce expenses and increase profits in response.

Companies in various sectors are facing new labor contracts that have driven up costs, making the adjustments to the labor market and capital market to lead to a more sustainable environment of lower inflation and lower interest rates. Layoffs are expected to continue to increase as companies gradually achieve lower inflation and lower interest rates, as well as slower growth.

American companies have been reducing expenses in response to shifting demand and supply in the economy and reduced consumer spending and sales. The auto industry, for example, faced a supply issue and is now considering a demand problem with slowing adoption of electric vehicles. Many retailers, including Walmart, Target, and Home Depot, are expected to report similar losses or revenue declines in the coming weeks.



Read more: Companies make 2024 the year of cost cuts