Tech companies: tech titans hold back hiring in a “tough macro environment”

Paris: From the e-commerce giant, Amazon to the star of social networks Facebook, US technology companies that once grew with abandonment have held back hiring to endure tumultuous times.

Internet giants that saw business boom during the pandemic have taken a hit from inflation, war, problems with supply lines, and people reverting to pre-Covid lifestyles.

Corporate belt tension was an equally big common theme technology companies reported earnings for the first three months of this year.

Facebook parent A half Analysts said hiring goals were being adjusted as he continued to look forward to a bright future.

“We regularly evaluate our talent pipeline based on our business needs, and in light of the expense guidance provided for this earnings period, we are slowing growth accordingly,” a Meta spokesperson told AFP.

“However, we will continue to grow our workforce to ensure we focus on long-term impact.”

Discover the stories of your interest

Seattle-based Amazon, the second-largest employer in the United States, has revealed that its ranks are overly full after finishing last year with more than twice as many workers as in 2019.

As the spread of the Omicron variant of Covid-19 slowed during the first quarter of this year and workers returned from leisure, Amazon “quickly went from understaffed to oversized,” said the chief financial officer. CFO) Brian Olsavsky told analysts.

Twitter confirmed that he has suspended hiring and even showed the exit to some senior executives, as he faces an acquisition by Elon Musk, the richest person on the planet.

Musk sent mixed messages on Friday about his proposed acquisition of Twitter.

In a morning tweet, Musk said
the $ 44 billion acquisition was “temporarily suspended”, pending questions about the social media company’s estimates of the number of fake or “bot” accounts.

Two hours later, the unpredictable Tesla the chief executive tweeted that he was “still engaged in the acquisition”.

“Our industry is in a very challenging macro environment right now”,
Twitter CEO Parag Agrawal said in a tweet Friday.

“I will not use the deal as an excuse to avoid making important decisions for the health of the company, nor will any Twitter leader.”

To the pioneer of ride-sharing AboveChief Executive Officer (CEO) Dara Khosrowshahi they said they “will view hiring as a privilege,” according to an email to employees seen by CNBC.

While the big tech players have stayed away from budget-based layoffs, that’s not the case with the Robinhood stock trading platform or Cameo, an app that sells personalized celebrity video messages.

Robinhood said in April that it will cut nearly 350 positions, about 9% of its workforce. Cameo recently terminated 80 employee contracts, according to news website The Information.

The reasons for the cuts

The reasons for hiring curbs, blocks or cuts vary. Meta, for example, blamed a change Apple made to the software running its popular mobile devices that hinders the collection of user data to target ads more effectively.

Uber, meanwhile, reported that it was hit with a big loss in the first three months of the year, despite a rebound in its ride-sharing business.

The loss was almost entirely due to the revaluation of its holdings in Grab and Didi in Asia and US-based self-driving company Aurora, the earnings report said.

A common factor for many internet companies, however, was that quick hires made while demand was increasing during the pandemic led to overweight staffing in lean times.

“Many technology companies have met this demand with dramatic growth in digital services and, as such, have been recruiting and growing their business specifically in the past couple of years,” said Terry Kramer, assistant professor at the business school of UCLA.

“A reasonable part of what we’re seeing now I believe is the normal maturity of technology adoption, where companies can’t / don’t need to keep growing at the same pace.”

Another factor that weighs heavily is inflation, which has driven up overall costs and tightened consumer budgets.

The US central bank has steadily raised interest rates this year, making it more expensive for companies to borrow money.

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

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

“This is not a Dot-com 2.0 bubble,” Ives said in a note to investors.

“This is a huge over-correction in a higher speed environment that will result in a forked tech web, with clear advantages and disadvantages.”