3.5 C
New York
Monday, February 6, 2023

Buy now

From Amazon’s freeze to Lyft’s layoffs, tech companies are bracing for tough times

Tech companies are once again putting the brakes on hiring as they struggle with sluggish consumer spending, higher interest rates and the impact of a strong dollar abroad.

Tech companies are once again putting the brakes on hiring as they struggle with sluggish consumer spending, higher interest rates and the impact of a strong dollar abroad.

Amazon.com Inc. said Thursday it would pause adding new company employees, citing an “uncertain” economy and the boom in hiring in recent years. Lyft Inc., the taxi company, goes further: It will eliminate 13% of its workforce, or about 683 people.

The cuts of Twitter Inc. are under particular scrutiny as new owner Elon Musk shakes up the social networking industry and cuts about half of his jobs.

Tech companies took steps to contain costs earlier this year, with many of the industry’s largest companies freezing hiring or cutting some departments. Even Apple Inc., which has outperformed most of its competitors this year, is slowing spending and has cut much of its hiring. But some tech giants are finding that they now need to take more dramatic steps to cut spending.

More broadly, Challenger, Gray & Christmas said on Thursday that the number of layoffs had risen 48% year-over-year in October, with more layoffs “on the way.” A federal jobs report on Friday will provide a clearer picture of US hiring trends. Even with the cuts, economists expect a net profit of 200,000 for nonfarm payrolls.

Here are some of the latest belt-tightening companies:


The e-commerce titan has stopped “new incremental” hires for its corporate workforce — a decision Chief Executive Officer Andy Jassy and his team made this week. “We expect to continue this pause in the coming months and will continue to monitor what we see in the economy and the business to adapt if we think it makes sense,” said Beth Galetti, Amazon’s chief executive of human resources. .


The iPhone maker has paused hiring for many jobs outside of research and development, escalating an existing plan to cut budgets into next year, according to those in the know. The hiatus generally doesn’t apply to teams working on future devices and long-term initiatives, but it does affect some business functions and basic hardware and software engineering roles.


Chime Financial Inc., a digital banking startup, is cutting 12% of its workforce, or 160 people. A spokesperson said the company remains well capitalized and the move will position it for “continued success”.

Brave Labs

Founder and CEO of Dapper Labs Inc. Roham Gharegozlou said in a letter to employees on Wednesday that the company had laid off 22% of its staff. He cited macroeconomic conditions and operational challenges arising from the company’s rapid growth. Dapper Labs created the NBA Top Shot marketplace for non-functioning tokens, a digital asset class whose demand has fallen sharply since the crypto market downturn.

Digital Currency Group

Cryptocurrency conglomerate Digital Currency Group embarked on a restructuring last month that saw about 10 employees leaving the company. As part of the shakeup, Mark Murphy was promoted to President of Chief Operating Officer.

galaxy digital

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 is still subject to change and the final number could be between 15% and 20%, according to people familiar with the matter. Shares of Galaxy have plunged 70% this year, as part of a flight from cryptocurrencies.


Intel Corp. cuts jobs and slows spending on new factories in a bid 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 has resonated with investors, who sent shares up more than 10% on October 28. Bloomberg News previously reported that the workforce reduction could run into the thousands.


Lyft’s cost-cutting efforts include divesting its vehicle service business. The company, which is preparing to release its third-quarter results Monday, had already said it would halt hiring in the US until at least next year. It now faces even 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 have brought us to that.”

Opened door

Opendoor Technologies Inc. said this week it was laying off about 550 employees, about 18% of its workforce. The company, which is adopting a data-driven spin on home flipping called iBuying, is dealing with declining demand for homes due to higher mortgage rates. The iBuying model is based on acquiring houses, doing some repairs and then selling the properties, often in a short period of time.


Qualcomm Inc. said Wednesday it has halted recruitment in response to a faster-than-expected drop in demand for phones that use its chips. It now expects smartphone shipments to fall by double digits this year, worse than the outlook it gave just three months earlier.


Seagate Technology Holdings Plc, the largest maker of computer hard drives, said last week it was cutting about 3,000 jobs. Computer vendors, including Seagate and Intel, have been hit hard by a slowdown in hardware spending. Customers are sitting on a pile of extra inventory, putting orders at risk and weighing on Seagate’s financial performance, CEO Dave Mosley said. That necessitated budget cuts. “We have taken swift and decisive action to respond to current market conditions and improve 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 workforce reduction of 14% brings the workforce back to almost 7,000, the total in February. Co-founders Patrick and John Collison told staff to cut spending more broadly as they prepare for “lean times.”


Twitter’s turmoil has more to do with the recent buyout — and its debt — than economic concerns. But the company is currently facing the deepest budget cuts from its peers. Musk, who took over Twitter for $44 billion last month, plans to cut about 3,700 jobs, according to those in the know.

The new owner plans to inform affected staffers Friday, people said. Musk also plans to roll back the company’s work-from-anywhere policy and ask remaining employees to report to offices.


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

Source link

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected


Latest Articles