- After a spike in hiring from the world’s largest companies, the same businesses are now slashing their headcount in an effort to cut costs.
- More than 37,000 tech workers in the U.S. have been laid off so far this year according to a tally from Crunchbase News.
- In the months following widespread Covid-19 vaccine adoption, businesses ramped up their hiring efforts to meet skyrocketing consumer demand. What they didn’t forecast was that demand would not outpace growing inflation rates.
Over the last few months, an alarming phenomenon has been occurring. After a spike in hiring from the world’s largest companies, the same businesses are slashing their headcount in an effort to cut costs.
While it feels like just yesterday that job openings were lush, the economy’s instability has left companies doomsday prepping for a potential recession.
In fact, more than 37,000 tech workers in the U.S. have been laid off so far this year, according to a tally from Crunchbase News.
In the months following widespread Covid-19 vaccine adoption, businesses ramped up their hiring efforts to meet skyrocketing consumer demand. However, what they didn’t forecast was that demand would not outpace growing inflation rates.
Now, companies have been left with one goal in mind: weather the recession.
Some Companies That Have Conducted Layoffs
In July, European TikTok employees were informed that their jobs could be at risk as part of its business restructuring efforts.
“There are a small number of roles within the operations and marketing teams that shifted in focus, that can’t be called a ‘company-wide restructure,’” Anna Sopel, a TikTok spokesperson, said at the time.
Despite its denial of a full restructuring, employees across Europe and the U.S. were told that their jobs could be a risk.
After announcing a hiring freeze, Twitter revealed that it had laid off 30% of its acquisition team in July. The social media platform has hit major turbulence in recent months.
Its takeover deal from Elon Musk is sitting in legislation purgatory, leaving the company hanging on for dear life. While the outcome of this lawsuit is still months in the future, layoffs may continue to hinder Twitter’s profitable growth.
Online coupon company Groupon announced that it has cut 15% of its staff — more than 500 people.
Like other companies, Groupon is seeking to reduce its costs and set it on the right trajectory for net profit by the end of the year.
“Our overall business performance is not at the levels we anticipated and we are taking decisive actions to improve our trajectory,” said Kedar Deshpande, CEO of Groupon in a letter to staff.
Months after making a full commitment to remote working arrangements, Robinhood announced that it would be laying off 23% of its staff.
CEO and co-founder Vlad Tenev, like other leaders, cited overhiring as the main culprit for these layoffs. Last year, as retail activity skyrocketed, the company sought the help of more staff in order to meet demand.
However, as business slowed down, the company was left with excess workforce and not enough revenue to support them.
In June of this year, new Tesla hires were informed that they would be laid off after barely working for the company.
The electric vehicle manufacturer also rescinded job offers. While this was reportedly based on performance reviews, some former employees claim that they hadn’t worked at the company long enough to substantiate an actual performance review.
This came after CEO Elon Musk said that he had a “super bad feeling” about the economy and predicted that Tesla may have to lay off around 10% of its staff.
Companies That Have Paused Hiring Or Teased Layoffs
“Realistically, there are probably a bunch of people at the company who shouldn’t be here.”
That is exactly what Mark Zuckerberg said during an all-hands meeting at Meta recently, where the CEO discussed its current structure, the incoming economic downturn and the future of the company.
In June, Zuckerberg said that Meta’s engineering department could see major cuts. However, without directly spelling it out, the tech leader appears to be encouraging employees to leave on their own accord.
“[Part] of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might just say that this place isn’t for you. And that self-selection is okay with me.”
In a slightly better standing than other companies, Google revealed in July that it would slow down its hiring initiatives.
According to CEO Sundar Pichai, the tech giant will continue to seek new talent, but that it would focus more on technical roles as the economy’s future hangs in the balance.
“We need to be more entrepreneurial, working with greater urgency, sharper focus and more hunger than we’ve shown on sunnier days,” said Pichai.
Several job openings at Microsoft were taken down last month as fears over the economy mounted.
However, the company said that current job offers would stay in place despite it rolling back on hiring across various sectors of its business, including its Azure public cloud division and cybersecurity software group.
While it is one of the leaders of the music streaming platform industry, Spotify revealed last June that it would cut its hiring efforts by 25%.
It’s one of many within the tech world that has struggled to stay afloat amidst falling stocks and increased cost of operating.
At the time, Spotify spokesperson Adam Grossberg said that the current bear market hasn’t had “any material impact to our business” just yet, but that it would be monitoring the situation and “evaluating our headcount growth in the near term.”