Tech companies put jobs on hold as they prepare for tough times

Tech companies put jobs on hold as they prepare for tough times

Tech companies are hitting the brakes again when it comes to hiring as they grapple with slow consumer spending, higher interest rates and the impact of a strong dollar Exterior.

Amazon said on Thursday it would stop recruiting, blaming an uncertain economy and its hiring boom in recent years. Lyft, the shared transport company, goes further: it will lay off 13 percent of the staff, some 683 people.

Twitter’s cuts are under scrutiny as new owner Elon Musk shakes up the social media business and cuts about half of his jobs.

Tech companies took steps this year to rein in costs, with hiring freezes or department cuts. Even Apple, which has outperformed most of its peers this year, is cutting spending and halting much of its hiring. But some tech companies are realizing that they must now take drastic steps to reduce their spending.

More broadly, Challenger, Gray & Christmas said Thursday that job losses rose 48 percent year over year in October, with more layoffs on the way. However, a federal jobs report on Friday showed nonfarm payrolls rose by 261,000 last month, beating expectations.

The latest companies to tighten their belts include:

Amazon

The e-commerce company halted incremental new hires in its workforce this week. “We anticipate holding this pause for the next few months and will continue to monitor what we’re seeing in the economy and the business to adjust when we think it makes sense,” said Beth Galetti, Amazon’s senior human resources executive.

Apple

Apple has stopped hiring many jobs outside of research and development.  Reuters

The iPhone maker has paused hiring outside of research and development, an escalation of a plan to reduce budgets for next year, according to sources. The brake does not generally apply to teams working on future devices and long-term initiatives, but does affect some corporate functions and standard hardware and software engineering roles.

Ring

Digital banking startup Chime Financial is cutting 12 percent of its staff, or 160 people. A representative said the company remains well capitalized and the move will position it for “sustained success.”

dapper labs

Dapper Labs founder and CEO Roham Gharegozlou said in a letter to employees on Wednesday that the company had laid off 22 percent of its staff. He cited macroeconomic conditions and operational challenges caused by the company’s rapid growth. Dapper Labs created the NBA Top Shot marketplace for non-fungible tokens, a digital asset class that has lost its appeal since the cryptocurrency market downturn.

Digital Currency Pool

Cryptocurrency conglomerate Digital Currency Group embarked on a restructuring last month when 10 employees left. As part of the reorganization, Mark Murphy was promoted to president from chief operating officer.

digital galaxy

Galaxy Digital Holdings, the cryptocurrency financial services firm founded by billionaire Michael Novogratz, is considering laying off up to 20 percent of its workforce. The plan may change and the final number could be in a range of 15 to 20 percent, the sources said. Galaxy shares have plunged 70 percent this year, part of a crypto rout.

Intel

Intel is cutting jobs and cutting spending on new plants in an effort to save $3 billion next year, the chipmaker said last week. The hope is to save up to $10 billion by 2025, a plan that was welcomed by investors, who sent the stock up more than 10 percent on Oct. 28. Bloomberg News previously reported that job losses could be in the thousands.

lyft

Lyft had said it would freeze hiring in the US until at least next year.  Reuters

Lyft’s cost-saving efforts include the sale of its vehicle services business. The company, which is set to report third-quarter results on Monday, had already said it would freeze US hiring until at least next year. Now it faces stronger 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 execute better without having to change plans in response to external events, and the harsh reality is that today’s actions prepared us to do so.”

Open door

Opendoor Technologies said this week that it will lay off about 550 employees, about 18 percent of its staff. The company, which practices a data-driven spin on home sales called iBuying, is grappling with slowing demand for homes due to higher mortgage rates. The iBuying model is based on buying houses, making some repairs and then selling the properties, often in a short period of time.

Qualcomm

Qualcomm said on Wednesday it froze hiring in response to a faster-than-feared decline in demand for phones, which use its chips. He now expects smartphone shipments to decline in the double-digit percentage range this year, worse than the outlook he gave three months earlier.

Seagate

Seagate Technology Holdings, the largest maker of computer hard drives, said last week it will lay off about 3,000 people. Computer vendors, including Seagate and Intel, have been hit hard by a slowdown in hardware spending.

Customers are sitting on a pile of inventory, hurting orders and weighing on Seagate’s financial performance, Chief Executive Officer Dave Mosley said. That meant cuts. “We have taken swift and decisive action to respond to current market conditions and improve long-term profitability,” he said.

Stripe

Payments company Stripe, one of the world’s most valuable startups, is cutting more than 1,000 jobs. The 14 percent staff reduction will bring its staffing back to nearly 7,000, its total in February. Co-founders Patrick and John Collison told staff they need to cut spending more broadly as they prepare for “more difficult times.”

Twitter

Twitter's new owner, Elon Musk, began his massive job cuts at the company on Friday.  AFP

The turmoil on Twitter has more to do with his recent purchase, and the accompanying debt, than financial concerns. But the company faces the deepest cuts of its peers right now: Musk, who acquired Twitter for $44 billion last month, layoffs started Friday. Musk also intends to roll back the company’s work-from-anywhere policy, asking remaining employees to report to offices.

Upstart

Upstart Holdings, an online lending platform, said in a regulatory filing this week that it has cut 140 hourly employees “given the challenging economy and the reduction in lending volume on our platform.”

Updated: November 06, 2022, 7:00 am

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