Tech titans cut back on hiring in a challenging macro environment’

The US tech companies that once grew without restraint, such as Amazon and Facebook, have resisted the temptation to hire to withstand turbulent times.

Internet giants that enjoyed a boom during the pandemic have suffered from inflation, war, supply line trouble, and people returning back to pre-COVID lives.

Big tech firms reported earnings in the first three months of 2015, which was a common theme.

Meta, parent of Facebook, stated to analysts that the company was revising its hiring goals in order to continue to see a bright future.

“We regularly reevaluate our talent pipeline in accordance with our business needs and in light of this earnings guidance, we are slowing down its growth accordingly,” a Meta spokesperson said to AFP.

“We will however continue to grow our workforce in order to focus on long-term results.”

Amazon, a Seattle-based employer, has revealed that its ranks have become overly full after it ended the year with twice the number of workers than it did in 2019.

According to Brian Olsavsky, chief financial officer of Amazon, the spread of Omicron COVID-19 slowing down during the first quarter of 2015 and workers returning from time off, Amazon “quickly moved from being understaffed towards being overstaffed.”

Twitter confirmed that it had suspended all hiring and even displayed a few Senior executivesThe exit is a result of Elon Musk’s takeover.

Musk sent mixed messages Friday regarding his proposed Twitter acquisition.

Musk stated in a tweet that the $44B acquisition was “temporarily On Hold” while he waited to answer questions about the estimates of fake accounts or “bots” on the social media site.

Two hours later, the unpredictable Tesla appeared. Chief executiveTweeted that he was still committed to acquisition.

Parag Agrawal, chief executive of Twitter, stated Friday in a tweet that “our industry is in very challenging macro environmentsright now.”

“I won’t use the deal to avoid making important decisions.” important decisionsTwitter’s health and the well-being of its employees, as well as any leader at the company.

Uber’s CEO Dara Khosrowshahi stated that they will treat hiring as an honor at the ride-share startup. This was according to an email CNBC received from employees.

Big tech players have avoided budget-driven layoffs. However, this is not the case with stock trading platform Robinhood or Cameo. Cameo sells custom videos from celebrities.

Robinhood stated in April that it would cut almost 350 positions, which is 9 percent of its workforce. According to The Information news website, Cameo terminated the employment contracts of 80 employees.

The Reasons for the Cuts

There are many reasons to hire curbs, freezes, or cuts.

Meta, for example blamed Apple’s software on its popular mobile devices. This tweak blocks the collection and targeting of user data more effectively.

Uber reported that it suffered a significant loss in the first three months despite a rebound of its ride-sharing business.

The loss was almost entirely due the revaluation by Grab and Didi in Asia, and US-based autonomous driver firm Aurora. Earnings report said.

However, many internet firms shared a common factor: the rapid hiring that took place during the pandemic caused overstaffing in less time.

“Many tech companiesThey have been satisfying this demand with notable growth digital services and as such, recruited & grew their business notably over these past two years,” said Terry Kramer. He is an assistant professor at UCLA’s business school.

“A reasonable part” of what I see right now, I believe, is the normal maturity and adoption of technology. Companies can’t/don’t have to keep growing at this rate.

Inflation is another factor that weighs heavily. It has driven up overall costs and tightened consumer budgets.

Companies can borrow money more expensively because the US central Bank has been steadily increasing interest rates.

On Wall Street, an S&P 500 index comprising tech sector stocks has fallen more than 22 percent since the start of the year, and the tech-heavy Nasdaq is down slightly more overall.

Daniel Ives, a Wedbush analyst, advised investors to not fear a repeat of the Dot-com crash in the late 1990s.

Ives stated in a note to investors that “This isn’t a Dot-com Bubble 2.0.”

“It’s a huge overcorrection in higher rate environments that will cause a bifurcated technology tape, with clear haves or have-nots.”

2022 AFP