Tech companies hit the brakes as they brace for tough times

Tech companies are hitting the hiring brakes again as they grapple with the fallout from sluggish consumer spending, rising interest rates and a strong dollar overseas.

Amazon said on Thursday it would suspend hiring, blaming an uncertain economy and a hiring boom in recent years. Ride-hailing company Lyft is going further: It will lay off 13% of its workforce, or about 683 people.

Twitter’s plans to cut jobs are closely watched as new owner Elon Musk restructures the social networking business and slashes about half of its jobs.

Tech companies have taken steps this year to rein in costs, freezing hiring or cutting departments. Even Apple, which has outperformed most of its peers this year, is slowing spending and suspending most hiring. But some tech companies are finding they need to take drastic steps now to reduce spending.

More broadly, Challenger, Gray & Christmas said Thursday that job losses rose 48% in October from a year earlier, with more layoffs to come. However, Friday’s federal jobs report 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 new incremental hiring to its workforce this week. “We expect to maintain this suspension for the next few months and will continue to monitor what we’re seeing in the economy and our business,” said Beth Galetti, Amazon’s senior human resources executive. to make adjustments as we deem reasonable.”

apple

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

The iPhone maker has suspended hiring outside of research and development, according to sources, as an upgrade to plans to shrink its budget next year. Brakes are generally not suitable for teams working on future equipment and long-term plans, but it affects some corporate functions and standard hardware and software engineering roles.

bells

Digital banking startup Chime Financial is laying off 12% of its workforce, or 160 people. A representative said the company remained well-capitalized and the move would make it “continued to be successful.”

Small and exquisite laboratory

Dapper Labs founder and CEO Roham Gharegozlou said in a letter to employees Wednesday that the company has cut 22% of its workforce. He cited macroeconomic conditions and operational challenges posed by the company’s rapid growth. Dapper Labs created the NBA Top Shot market for non-fungible tokens, a digital asset class that has lost traction since the cryptocurrency market downturn.

Digital Currency Group

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

Galaxy Digital

Galaxy Digital Holdings, a cryptocurrency financial services company founded by billionaire Michael Novogratz, is considering laying off up to 20% of its workforce. The plan could change and the final figure could be between 15% and 20%, the sources said. Shares of Galaxy have plunged 70% this year as part of a plunge in cryptocurrencies.

Intel

The chipmaker said last week that Intel is cutting jobs and slowing spending on new factories in an effort to save $3 billion over the next year. Hopes to save as much as $10 billion by 2025 have been well-received by investors, who sent shares up more than 10% on Oct. 28. Bloomberg News earlier reported that job losses could run into the thousands.

Lyft

Lyft has said it will freeze U.S. hiring until at least next year.Reuters

Lyft’s cost-saving measures include divesting its vehicle services business. The company, which is preparing to report third-quarter results on Monday, has said it will freeze U.S. hiring until at least next year. It now faces even bigger headwinds.

“We are not immune to the reality 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 stark reality is that today’s actions allow us to do that.”

open the door

Opendoor Technologies said this week that it would cut about 550 jobs, or about 18% of its workforce. The company, which has implemented a data-driven spin called iBuying on home flipping, is dealing with a slowdown in housing demand due to rising mortgage rates. The iBuying model relies on buying a home, doing some repairs, and then selling the property, usually within a short period of time.

Qualcomm

Qualcomm said on Wednesday it had frozen hiring in response to concerns that demand for phones using its chips was falling faster than people. It now expects smartphone shipments to fall by double digits this year, down from the outlook it gave three months ago.

Seagate

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

Chief executive Dave Mosley said customers were sitting on a pile of inventory, hurting orders and hurting Seagate’s financial performance. That means cutting back. “We have acted quickly and decisively 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 laying off more than 1,000 jobs. The 14% layoffs will bring its workforce back to nearly 7,000 — the February total. Co-founders Patrick and John Collison told staff they needed to cut spending more broadly to prepare for “a leaner era”.

Twitter

Twitter's new boss, Elon Musk, began a massive layoff at the company on Friday.AFP

Twitter’s upheaval has less to do with economic concerns than with its recent acquisitions and the debt that comes with it. But the company is now facing the biggest layoffs of its peers: Musk, who bought Twitter last month for $44 billion, began laying off workers on Friday. Mr. Musk also intends to reverse the company’s “work from anywhere” policy, requiring remaining employees to report to the office.

upstart

Online lending platform Upstart Holdings said in a regulatory filing this week that it cut 140 hourly workers “in light of the challenging economic situation and the reduction in lending volumes on our platform.”

Updated: November 6, 2022, 7:00 am



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