Uncertainty about the economy and tariffs is forcing many retailers to be cautious about holiday hiring

NEW YORK (AP) — Uncertainty about the economy and tariffs are forcing retailers to scale back or delay plans to hire seasonal workers who pack orders at distribution centers, serve shoppers in stores and build holiday displays during the most important selling season of the year.

Dan Casterella, CEO of American Christmas LLC, which creates elaborate holiday installations for commercial properties such as New York’s Rockefeller Center and Radio City Music Hall, said it plans to hire 220 temporary workers and is ramping up hiring about two months later than usual. Last year, it received 300 people during its busiest period.

Read more: Without a new jobs report, the US is “flying blind” on hiring in an uncertain economy

The main reason? The company wants to offset the tariff bill, which Casterella expects to reach $1.5 million this year, more than double last year’s bill of $600,000.

“The problem is if you overstaff and then underperform, it’s too late,” Casterella said. “I think everyone is more aware now than ever before.”

Holiday employment may fall to 2009 levels

Online giant Amazon said Monday it plans to hire 250,000 full-time, part-time and seasonal workers for the crucial shopping period, the same level as a year ago.

But staffing firm Challenger, Gray & Christmas expects total holiday hiring during the last three months of the year to fall below 500,000 jobs. This is below last year’s level of 543,000 and also represents the smallest seasonal gain in 16 years when retailers hired 495,800 temporary workers, the company said.

Other companies cutting holiday pay include Radial, an e-commerce company that delivers for about 120 businesses like Lands’ End and Cole Haan and operates 20 fulfillment locations. Sabrina Norowski, chief human resources officer, said she plans to hire 6,500 workers, down from 7,000 last year, and is waiting until the last minute to ramp up hiring for some of her clients.

Bath & Body Works, based in Reynoldsburg, Ohio, said it plans to hire 32,000 workers, down from 32,700 workers last year.

“We have seen real strong signs that there is a slowdown in the labor market, even beyond our expectations in the first nine months of the year,” said Andy Challenger, Challenger senior vice president.

Challenger also noted that companies are using AI robots to replace some workers, especially those who work in call centers. He also sees companies hiring workers sooner when they need them.

Meanwhile, the list of companies remaining tight-lipped about their specific holiday hiring targets continues to grow. Target Corp, UPS and Macy’s decline to provide numbers, a departure from past years.

Holiday hiring: The first clues to what spending holds

Retailers’ hiring plans represent the first signs of what’s in store for the U.S. holiday shopping season, and come as the U.S. labor market has lost momentum this year, in part because Trump’s trade wars have created uncertainty that has paralyzed managers trying to make hiring decisions.

The Labor Department reported in early September that U.S. employers — companies, government agencies and nonprofits — added just 22,000 jobs in August, down from 79,000 jobs in July and well below the 80,000 jobs economists had expected.

The government shutdown, which began on October 1 and delayed the release of economic reports, may worsen the jobs picture.

In an effort to put more pressure on Democratic lawmakers as the government shutdown continues, the White House Budget Office said Friday that mass firings of federal employees have begun.

Analysts will closely monitor the impact of the lockdown on spending. For now, many retailers say consumers, though flexible, are picky. Analysts will also be watching how shoppers react to price increases as a result of higher tariff costs in the next few months, experts said.

Given the economic slowdown, holiday spending growth is expected to be lower than a year ago, according to many forecasts.

Mastercard SpendingPulse, which tracks spending across all payment methods including cash, expects holiday sales to rise 3.6% from Nov. 1 through Dec. 24. This compares to an increase of 4.1% last year.

Deloitte Services LP expects holiday retail sales to rise 2.9% to 3.4% from November 1 to January 31. This compares to 4.2% last year.

Adobe expects online sales in the United States to reach $253.4 billion from November 1 to December 31, representing growth of 5.3%. This is lower than last year’s growth of 8.7%.

More flexible approach

Experts said companies increasingly want to hire workers sooner when they need them.
“In today’s environment, brands are really looking to be flexible,” Radial’s Wonorowski said.

So, for some of its clients, Radial will now be hiring two weeks before Thanksgiving weekend, the traditional start of the season, instead of four weeks before kickoff. Radial is also making holiday employees train faster with new technology that simplifies their tasks. She said it used to take a few days to train a worker, but now it only takes a few hours.

Meanwhile, Target will provide current workers with overtime and then tap a separate group of workers — 43,000 — who take shifts. The Minneapolis-based company said it is also hiring seasonal workers across nearly 2,000 stores and more than 60 distribution facilities to meet demand.

For the past few years, Walmart, the largest private employer, has offered its workers extra hours available during the holidays, a Walmart spokesman said, noting that it worked well and that feedback from customers and workers was “very positive.”

The Bentonville, Arkansas-based retailer said there may be some seasonal hiring on a store-by-store basis, but most locations will distribute those hours to existing workers.

The opacity of economic data may create challenges

Waiting until the last minute to hire can mean a frantic scramble to find talent, but companies say that with the economy slowing, they don’t expect to have a tough time.

Meanwhile, the pause in economic reporting leaves retailers in the dark about sales forecasts and the workers they might need.

“Our customers not having access to data will certainly pose a greater challenge to their ability to forecast,” Radial’s Wonorowski said. “But we will stay very close to them when we reach the peak and we will adapt as soon as we see things changing.”