Since the beginning of the year, several tech giants have announced a slowdown in their recruitment, and even layoffs.
Ending the health crisis, the war in Ukraine, inflation and the specter of an imminent recession in the United States. In an uncertain economic context, tech giants fear for their growth prospects.
The sector has grown accustomed to rampant growth over the past decade. Apple, Microsoft and Amazon are among the most valuable companies in the world, with 2,380 billion dollars, 1,930 billion dollars and 1,130 billion dollars respectively.
On the strength of their performance, they recruited well. Over the past five years, Meta (Facebook’s parent company), Apple, Microsoft and Alphabet (Google) have nearly doubled their combined number of full-time employees to reach a total of around 563,000 employees, one calculates Wall Street Journal. Amazon alone employed more than 1.6 million people worldwide by the end of 2021.
But at the beginning of the year, several of them announced a slowdown in their recruitment, or even layoffs. These announcements, if they show a slowdown, should be put into perspective.
Figures released on Friday, July 8 by the US Department of Labor show that the sector continued to create jobs in June, at a faster rate than before the start of the health crisis. But a decline in job creation has been at work in recent months. Review various announcements.
Netflix is losing subscribers and taking off
Dark times for Netflix too. Launched in 1997, the video-on-demand platform lost subscribers – 200,000 – for the first time in its history in the first quarter of 2022. A fall that continued in the second quarter with almost a million fewer subscribers.
This loss of speed follows Netflix’s massive investment in content creation to maintain its position as the world leader in the video streaming market, while new players have emerged, such as the Disney + platform in 2019.
Netflix successively announced that it was laying off 25 employees in April, then 150 in May and finally, 300 employees (3% of its payroll) worldwide at the end of June. Since its peak in November 2021, its valuation has fallen by more than 70%.
Microsoft lays off but promises recruitment
Without giving specific numbers, Microsoft said it laid off July 11 “less than 1%” of its workforce of 180,000 employees, Bloomberg reported. The layoffs are related to several services, especially “advice and solutions for customers and partners”, and are spread across several geographical areas, the IT group told Bloomberg.
These dismissals come as the group closes its fiscal year on a rolling basis at the end of June. However, Microsoft said it intends to continue hiring in other positions and end the current fiscal year with an increased number of employees in June 2023.
Shopify is bearing the brunt of the pandemic
Based on consumer trends linked to periods of confinement, Shopify made a bad bet. Therefore, the online sales platform laid off 10% of its employees on July 27, or about 1,000 people. Despite regular use of the service during the Covid-19 pandemic, consumers have not changed their habits enough to justify the company’s recent acquisition in Canada.
Twitter continues to find cost
The social network announced in early July that it was laying off 30% of its human resources team, equivalent to one hundred people. The American company had already announced in May that it would take a break from its recruitments. The goal: to reduce its costs and make itself desirable in the eyes ofElon Musk. Except that since then, the boss of Tesla withdrew its offer beginning of July. Now, a trial, which will begin on October 17, must determine whether the sale, worth $ 44 billion, can be imposed on the richest man in the world.
A few days after the transaction was aborted, Twitter specified in a document that it was not considering the layoffs, but wanted to continue its search for the cost, explained Reuters. In an internal memo consulted by Wall Street Journalthe company wrote in May of its intention to reduce its spending on external resources such as consultants, as well as its costs for travel and events, marketing, real estate, infrastructure and other operational costs.
TikTok launches an “internal restructuring”
TikTok is changing its requirements downwards. Less than a hundred employees will be leaving the short video platform’s workforce, Wired has learned. Called “internal restructuring” by a spokeswoman, this wave of layoffs targets people and teams who aren’t contributing enough to the company.
A former employee who left earlier in the year linked this decision to the abandonment of the TikTok Shop shopping service. The restructuring should affect the United States, Europe and the United Kingdom, which has at least 10,000 employees according to the American magazine.
Google will slow hiring
No layoffs in sight at Google, but hiring cuts through 2022. In an email sent to employees on July 12, CEO Sundar Pichai explained that the group will “slow the pace of hiring for the remainder part of the year”, reported by Wall Street Journal.
Google recruited about 10,000 new employees in the second quarter and recruitment is still underway this quarter, the CEO said.
“To move forward, we need to be more entrepreneurial, work with more urgency, sharper focus and more aggressiveness than we have shown in better days,” he said. wrote Sundar Pichai, referring to the uncertain growth environment.
And to continue: “In some cases, this means consolidating where investments overlap and streamlining processes. In other cases, this means pausing deployment and re- deploy resources to higher priority areas.”
Facebook is putting the pressure on
Facebook’s parent company announced in early July the reduction of his employment plans engineers by at least 30% this year. It should still recruit between 6,000 to 7,000 engineers by 2022, against the 10,000 positions initially budgeted for.
Beyond reducing its job vacancies, Meta will intentionally leave job vacancies open. The goal is clearly assumed: to increase the pressure on the performance indices, to expel those who cannot achieve the new goals.
At Uber, hiring is a “privilege”
Same story with Uber. App CEO Dara Khosrowshahi said internally that the company “considers the hire a privilege,” the app reported. Wall Street Journal it’s the beginning of May.
Launched in 2009, the VTC application (car reservation with driver) is still not profitable. It is trying to cut costs to reassure its investors, as its stock market has fallen more than 65% in the past 18 months.
After disappointing results, Snapchat is tightening its belt
In a more challenging second quarter of 2022 than expected, Snapchat fell short of its goals. After the announcement of the results on July 21, the company’s stock fell 25%, CNN noted.
However, the boss warned in May that the results are not there, as indicated by TechCrunch. The platform is preparing for a reduction in costs. Although this does not imply dismissal, only essential positions will be replaced in the event of a departure.
Despite rising results, Spotify is also pulling the handbrake
While the audio streaming leader is still showing strong growth, it announced in mid-June a 25% drop in recruitment this year.
This announcement was more a measure of hope than reaction, argued group finance director Paul Vogel, during the presentation of quarterly results to investors in June:
We are aware of the growing uncertainty in the global economy. And while we have yet to see a concrete impact on our business, we are closely monitoring the situation and reassessing our growth in our short-term workforce.”