More companies announce hiring freezes and job cuts
SAN FRANCISCO>> The technology industry’s slowdown came into even sharper relief Thursday as Amazon publicly said it had paused hiring for its corporate workforce and several other technology companies announced job cuts.
Amazon said senior executives this week decided to pause incremental corporate hiring because the economy was “in an uncertain place.” The move added to a freeze from last month when the e- commerce giant halted corporate and technology hiring in its retail business for the rest of the year.
“We anticipate keeping this pause in place for the next few months and will continue to monitor what we’re seeing in the economy and the business,” said Beth Galetti, the Amazon executive in charge of human resources, in a note posted internally and on the company’s blog.
At the same time, ride-hailing service Lyft said it would cut 13% of its employees, or about 650 of its 5,000 workers. Stripe, a payment processing platform, said it would cut 14% of its employees, about 1,100 jobs.
Tech giants including Meta and Amazon have been slowing down their hiring for months, while smaller tech companies such as Robinhood and Coinbase have announced layoffs. But rarely have so many job cuts and hiring freezes in the industry been disclosed on the same day.
Tech companies have led the way for the U. S. economy over the past decade, lifting the stock market during the worst days of the pandemic. But in recent weeks, many of the largest firms reported financial results that suggested they were feeling the impact of global economic jitters, soaring inflation and rising interest rates.
Social media companies in particular have been grappling with a pullback in digital advertising over the past few months. Meta, which owns Facebook and Instagram, said last week that its head count would remain “roughly flat” through the end of next year. The company plans to shrink some teams and hire only for high- priority areas. Snap, Snapchat’s parent company, laid off 20% of its employees in August, blaming challenging macroeconomic conditions.
Last week, Microsoft told investors that new hires in this quarter “should be minimal.” Alphabet, which owns Google and Youtube, also said that in this quarter it would hire less than half the number of people it added in the third quarter.
Amazon cautioned investors that revenue growth this quarter could weaken to the slowest pace in two decades, which includes the critical holiday shopping season.
After doubling its workforce in 2020 and 2021, Amazon has shrunk since the start of this year. The company employed 1.5 million people at the end of the third quarter.
More layoffs at tech companies are in the works. Elon Musk, who purchased Twitter for $ 44 billion last week, has ordered cuts across the social media company, which employs about 7,500 people. Workers at the company have started circulating a “Layoff Guide” with tips on how to handle being laid off.
On Thursday, Lyft said it had decided on layoffs in the face of “a probable recession sometime in the next year.” All teams would be affected, said Logan Green and John Zimmer, the company’s founders, in an email to employees.
“It was important to take these proactive actions to ensure we can accelerate execution, stay focused on the best opportunities to drive profitable growth, and deliver strong business results,” Green and Zimmer wrote.
Over the summer, Lyft cut 2% of its employees, mostly as a result of shutting down its car rental business, and implemented a hiring freeze. But the company still had “to become leaner,” its founders said. It was “not immune to the realities of inflation and a slowing economy,” which had led to increasing ride- share insurance costs.
Lyft also said that it planned to sell its first-party vehicle service business and that it expected employees on that team to be offered jobs at the acquiring company.