Tech companies are once again tapping the brakes on hiring as they contend with sluggish consumer spending, higher interest rates and the impact of a strong dollar overseas.
Amazon.com Inc. said Thursday that it would pause adding new corporate workers, citing an “uncertain” economy and its hiring boom in recent years. Lyft Inc., the ride-hailing company, is going further: It will eliminate 13% of staff, or around 683 people.
Twitter Inc.’s cutbacks are under particular scrutiny as new owner Elon Musk shakes up the social-networking business and pares roughly half its jobs.
Tech companies made moves earlier this year to rein in costs, with many of the industry’s biggest firms freezing hiring or cutting some departments. Even Apple Inc., which has outperformed most of its peers this year, is slowing spending. But some tech giants are finding that they now need to take more dramatic steps to trim their expenses.
More broadly, Challenger, Gray & Christmas said Thursday that job-cut announcements were up 48% year-over-year in October, with more layoffs “on the way.” A federal jobs report on Friday will give a clearer picture of US hiring trends. Even with the austerity, economists expect a net gain of 200,000 for non-farm payrolls.
Here are some of the latest companies to tighten their belts:
The e-commerce titan halted “new incremental” hiring across its corporate workforce — a decision Chief Executive Officer Andy Jassy and his team made this week. “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 to adjust as we think makes sense,” according to Beth Galetti, Amazon’s top human resources executive.
The digital-banking startup Chime Financial Inc. is cutting 12% of its staff, or 160 people. A spokesperson said the company remains well-capitalized and the move will position it for “sustained success.”
Digital Currency Group
Cryptocurrency conglomerate Digital Currency Group embarked on a restructuring last month that saw about 10 employees exit the company. As part of the shake-up, Mark Murphy was promoted to president from chief operating officer.
Galaxy Digital Holdings Ltd., the crypto financial services firm founded by billionaire Michael Novogratz, is considering eliminating as much as 20% of its workforce. The plan may still be changed and the final number could be in a range of 15% to 20%, according to people familiar with the matter. Galaxy’s shares have plummeted 70% this year, part of a rout for cryptocurrencies.
Intel Corp. is cutting jobs and slowing spending on new plants in an effort to save $3 billion next year, the chipmaker said last week. The hope is to save as much as $10 billion by 2025, a plan that went over well with investors, who sent the shares up more than 10% on Oct. 28. Bloomberg News reported earlier that the headcount reduction could number in the thousands.
Lyft’s cost-saving efforts include divesting its vehicle service business. The company, which is preparing to report third-quarter results on Monday, had already said it would freeze hiring in the US until at least next year. It’s now facing even stiffer headwinds.
“We are not immune to the realities of inflation and a slowing economy,” co-founders John Zimmer and Logan Green said in a memo. “We need 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today’s actions set us up to do that.”
Seagate Technology Holdings Plc, the biggest maker of computer hard drives, said last week that it’s paring about 3,000 jobs. Computer suppliers, including Seagate and Intel, have been hard hit by a slowdown in hardware spending. Customers are sitting on a pile of extra inventory, hurting orders and weighing on Seagate’s financial performance, CEO Dave Mosley said. That necessitated cuts. “We have taken quick and decisive actions to respond to current market conditions and enhance long-term profitability,” he said.
Payments company Stripe Inc., one of the world’s most valuable startups, is cutting more than 1,000 jobs. The 14% staff reduction will return its headcount to almost 7,000 — its total in February. Co-founders Patrick and John Collison told staff that they need to trim expenses more broadly as they prepare for “leaner times.”
The upheaval at Twitter has more to do with its recent buyout — and the accompanying debt — than economic concerns. But the company is facing the deepest cuts of its peers right now. Musk, who acquired Twitter for $44 billion last month, plans to eliminate about 3,700 jobs, according to people with knowledge of the matter.
The new owner plans to inform affected staffers Friday, said the people. Musk also intends to reverse the company’s work-from-anywhere policy, asking remaining employees to report to offices.
Upstart Holdings Inc., an online lending platform, said in a regulatory filing this week it cut 140 hourly employees “given the challenging economy and reduction in the volume of loans on our platform.”
–With assistance from Edward Harrison, Matt Day, Ed Ludlow, Kurt Wagner, Yueqi Yang, Anna Irrera, Jenny Surane, Vildana Hajric, Muyao Shen, Katie Greifeld and Ian King.
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