Tech companies are responding to the state of the economy by freezing, hiring, or laying off employees.
- Major tech companies are facing a surge in layoffs over the coming months, Axios reports.
- Amazon, Lyft, Stripe, Apple, CNN, and more have announced plans either to cut staff or freeze new hiring for the immediate future.
- Amazon cited an “unusual macro-economic environment” while Lyft blamed inflation and economic slowdown for laying off 13% of its staff.
- The surge comes following Twitter’s announcement that it will cut 50% of its workforce, following Elon Musk’s purchase of the platform.
- Today’s BLS report shows that the U.S. economy added 261,000 jobs in October, showing the overall labor market is still strong. The unemployment rate is currently 3.7%.
Why it’s News
The economy is behaving in strange ways that have many economists confused. As we previously reported, jobs are plentiful, hiring is up, and core growth indicators are strong and yet they are dampened by recession fears and the reality of entrenched inflation.
“Tech is the most forward-looking of all industries. You don’t hire for where you’re at today—you hire for where you aspire to be tomorrow,” says Axios.
“So it’s still a little hard for most people in Silicon Valley, and the wider tech industry, to get their heads around just how tough times could be getting for them. Tons of layoffs and freezes are being announced or leaked as companies race to prepare for bleak months ahead.”
The ongoing phenomenon of “quiet quitting,” “the great resignation,” and mass burnout have cooled the job market but hiring is still doing better than expected and opportunities are plentiful. This hasn’t translated into the tech industry though.
Backing up a Bit
As we previously reported, Twitter is a unique voice in tech’s ongoing workforce issues as it is actively choosing, under the direction of new owner Elon Musk, to purge large amounts of staff and internally rebuild the company.
“Twitter today is taking the extreme step of locking its offices and suspending employees’ badge access, as new CEO Elon Musk begins mass layoffs expected to cut deep into the platform’s 7,500 employees. In an ominous email to staff, Twitter said cuts will begin at noon ET … Internal plans earlier this week had Musk looking to cut 3,700 Twitter staff or about half the workforce,” says Axios.