Paris: From the e-commerce colossus AmazonSocial networking star FacebookUS tech companies, which once grew inexorably, have slowed down their hiring to survive turbulent times.
InternetThe pandemic has caused a lot of damage to giants who had seen business boom, including inflation, war, supply line trouble, and people returning back to pre-Covid lifestyles.
As a common theme, corporate belt-tightening was a popular one Big techEarnings from the first three month of this year were reported by firms
Facebook parent MetaAnalysts were informed that the company was revising its hiring goals as it continues to see a bright future.
“We regularly re-evaluate the talent pipeline according to business needs and in view of the expense guidance given during this earnings period, it is slowing its growth accordingly,” a Meta spokesperson stated to AFP.
“However, our workforce will continue to grow to ensure we are focusing on long-term impact.”
Amazon, a Seattle-based company, is America’s second largest employer. It ended last year with more workers than it had in 2019, and its ranks are now overly bloated.
As the Omicron version of Covid-19 spread slowed in the first quarter of 2018, and workers returned from vacation, Amazon “quickly moved from being understaffed towards being overstaffed,” Brian Olsavsky chief financial officer told analysts.
TwitterIt confirmed that it had suspended all hiring and even showed some senior executives the exit as it faces a takeover. Elon MuskThe richest person on earth is.
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 social media company’s estimates of fake accounts or “bots”.
Two hours later, the Tesla chief executive tweeted that he was still committed to acquisitions.
Twitter chief executive: “Our industry is currently in a very challenging macro-environment — right now.” Parag AgrawalFriday, in a tweet
“I will not use the deal to avoid making important decisions about the company’s health, nor will any leader at Twitter.”
Uber’s CEO Dara Khosrowshahi stated that they will “treat hiring like a privilege,” according an email to employees.
Big tech companies 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 announced in April that it would be cutting nearly 350 positions, or 9 percent of its workforce. According to The Information, Cameo recently terminated the contracts for 80 employees.
The reasons behind 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 gathering of user information to target ads better.
Uber reported that it suffered a significant loss in the first three months despite a rebound of its ride-sharing business.
The earnings report stated that the loss was almost entirely due in part to the revaluation its stakes in Grab in Asia and Didi in America, and in autonomous driving firm Aurora based in the US.
However, many internet firms shared a common factor: the rapid hiring that took place during the pandemic caused overstaffing in less time.
Terry Kramer, a UCLA assistant professor of business, said that tech companies have been satisfying this demand with notable growths in digital services. They have also recruited and grown their business significantly over the past two-years.
“A reasonable part” of what I see right now, I believe, is the normal maturity in technology adoption – where companies don’t/can’t continue growing at the same pace.
Inflation is another important factor. It has increased overall costs and tightened consumer spending.
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, Wedbush analyst advised investors not to be afraid of a recurrence in the Dot-com collapse of the late 90s.
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.”
