HomeCURRENT AFFAIRSBUSINESSIT Firms Brace for Recession by Slowing Down Hiring

IT Firms Brace for Recession by Slowing Down Hiring

A large number of tech companies are reporting overstaffing and have decided to cut back on hiring, due to fears of a recession. The companies, ranging from Amazon to Google, reported that after ramping up during the pandemic, they are overstaffed and needed to cut back.

With recession fears mounting, the war in Ukraine, and the lingering pandemic taking a toll, many tech companies are rethinking their staffing needs, with some of them instituting hiring freezes, rescinding offers, and even starting layoffs.

Here are a few of the dozens of companies that are cutting back:

According to an internal memo, Alphabet Inc., Google’s parent company, is decelerating its recruiting efforts. Like all companies, we’re not immune to economic headwinds,” said CEO Sundar Pichai. The search giant had nearly 164,000 employees at the end of March.

Amazon also reported in April that it was overstaffed after ramping up during the pandemic and needed to cut back. “As the variant subsided in the second half of the quarter and employees returned from leave, we quickly transitioned from being understaffed to being overstaffed, resulting in lower productivity,” said Chief Financial Officer Brian Olsavsky.

The company had 1.6 million workers as of March, making it the biggest employer in the tech world.

Simultaneously, Apple Inc. is planning to slow hiring and spending at some divisions next year to manage a possible economic slump. But it’s not a companywide policy, and the tech giant is still moving forward with an aggressive product-release schedule. Apple had 154,000 employees in September when its last fiscal year ended.

Lyft Inc., the transport service provider, told employees it was slowing down hiring in May following its precipitous stock drop. The company had about 4,500 employees in 2021. 

Meanwhile, Lyft’s rival Uber Technologies Inc. has been more upbeat. CEO Dara Khosrowshahi told Bloomberg in June that his company was “recession-resistant” and had no plans for layoffs.

Meta Platforms Inc., Facebook’s parent company, cut plans to hire engineers by at least 30 percent. CEO Mark Zuckerberg told employees that he’s anticipating one of the worst downturns in recent history. The company had more than 77,800 employees at the end of March.

Likewise, Microsoft Corp. announced to employees that hiring would slow down in the Windows, Office, and Teams groups, in an effort to brace for the economic volatility. The company had 181,000 employees in 2021. 

A highly publicised amount of layoffs took place at Netflix Inc. in the last few months. The streaming giant reported the loss of 200,000 subscribers in the first quarter, causing it to slowly reduce marketing initiatives in April, followed by cutting 150 employees in May and 300 in June. Last quarter, it reported $70 million in expenses from severance and shed an additional 970,000 subscribers. Netflix had 11,300 employees in 2021.

Twitter Inc. initiated a hiring freeze and began rescinding job offers in May, amid uncertainty surrounding Elon Musk’s acquisition of the company, according to an internal memo. The company had 7,500 employees in 2021.

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