Retailers like Walmart and Macy's are dramatically slowing seasonal hiring, a sign that inflation could hammer the holiday shopping season

Last year, as many as 665,000 people turned to seasonal retail jobs during the holidays. This year, they may have a harder time finding an open role.

• Retailers like Walmart and Macy's are reducing the number of seasonal jobs compared with 2021.
• Inflation and a tight labor market may be to blame for scaled-back hiring.
• But some retailers also learned from periods of over-staffing during the pandemic.

Last year, as many as 665,000 people turned to seasonal retail jobs during the holiday season. This year, they may have a harder time finding an open role. 

Walmart, Macy's, Michael's, Dick's Sporting Goods, and Target have announced their hiring plans in the last week, and almost all of them are scaling back on the number of short-term hires compared with last year:

• Walmart said this month it plans to hire 40,000 workers for the upcoming holiday season, a drastic shift from 2020 and 2021, when it set a holiday hiring goal of 150,000 workers
• Macy's will also cut back on the number of seasonal hires this year. The department store chain announced plans to hire 41,000 seasonal workers, down from 76,000 in 2021
• Michael's craft store is looking to fill 15,000 seasonal jobs this year, a decrease of 5,000 compared with last year
• Dick's Sporting Goods is also scaling back its number of open roles by 10% this year compared with 2021. 

Target appears to be the one major retailer bucking the trend: it's looking for 100,000 seasonal workers this year, the same number it hired last holiday season. 

Perhaps the truest indicator of holiday hiring will be Amazon, which last year opened up 150,000 seasonal jobs. A company spokesperson told Insider it was too early to share anything about its 2022 holiday plans. 

Why are there fewer seasonal jobs this year? 

For one, the unemployment rate is low, with job openings outpacing the number of available workers 2-to-1. Businesses looking to hire part-time workers may have a particularly hard time, Matthew Lavery, director of talent acquisition at UPS, recently told the radio program "Marketplace." 

"I mean, in the hourly space, people aren't just applying to our job, they're applying to 10 jobs," he said. "There's competition, and I think in some cases they're shopping."

For some retailers, the adjustments to seasonal hiring plans may be the result of lessons learned amid the pandemic. During Walmart's quarterly earnings call in May, CEO Doug McMillon said that company had hired up at the end of 2021 as the omicron variant spread through Walmart's workforce, only to be saddled with "weeks of over-staffing" that ate into the company's profit. Amazon highlighted a similar over-staffing problem following the holidays, an issue that could set the tone for this year's holiday hiring season. 

But inflation may also be to blame for scaled-back hiring plans. Months of sky-high inflation have taken their toll on consumer spending, leading some retailers to prepare for a lackluster holiday shopping season.

Retailers have already highlighted shifts in customer behavior, including trading down to cheaper brands and putting more purchases on credit cards — and taking longer to pay them off. In an August Morning Consult survey of 2,200 US adults, 77% reported shopping less overall, while 60% said they're delaying major purchases. 

Those shifts are expected to bleed into the typically busy holiday shopping season. Recent forecasts from Bain & Co. showed that while sales grew 13.2% during the 2021 holiday season, they're projected to grow only 7.5% this year, and only 1% to 3% when adjusted for inflation. During the most recent spate of quarterly earnings, several companies adjusted their guidance for the rest of the year, bracing for lower sales and profits, even amid the holidays.