Salesforce is apparently the latest company to rein in hiring as reports of hiring freezes and layoffs affecting tech workers mount. Twitter, Meta and Uber are among the companies that have cut hiring for various reasons in recent weeks, amid rising inflation and a continuing stock market sell-off.
"Since the start of the pandemic, organizations have accelerated their digital transformations to support new ways of working and reaching customers," said Jamie Kohn, research director in Gartner's human resources practice. “Tech companies have been at the center of everything. Now they are taking a step back to reassess what they need for future growth. Therefore, these frosts are most likely short-term interruptions.
Freezes at big tech companies stand in stark contrast to the broader hiring environment for tech workers, with a continuing talent shortage.
"Outside of the tech industry, the demand for tech jobs is still pretty high," Kohn said. “Many companies are still struggling to recruit the talent they need to meet their growing technology needs. Tech workers will continue to have plenty of options in the job market, even if they don't work at big tech companies. »
Cloud software provider Salesforce will suspend recruiting for certain openings in an effort to rein in spending, according to an internal memo seen by Business Insider. Some off-site business and corporate travel will also be canceled, according to Wednesday's report. (In a statement, Salesforce said it still expects to hire 4.000 workers this quarter.)
Facebook owner Meta also plans to suspend new hires for some engineering positions, according to The Verge, which obtained a recording of an internal meeting at the company. The hiring freeze follows a decision to cut spending in some areas early in the COVID-19 pandemic, including creating video and audio calling features to compete with Zoom and new shopping features.
The company had previously informed staff of its intention to suspend hiring at its engineering division for the remainder of 2022, according to a company memo seen by Business Insider earlier this month. Meta's chief financial officer, David Wehner, cited an "industry-wide" slowdown as one of the reasons for the decision, along with the invasion of Ukraine and changes to data privacy.
Details of a hiring freeze at Twitter also emerged last week, as the social media company prepares for a €44 billion takeover by Elon Musk, though no layoffs are currently expected, according to an internal email. of the company seen by The Verge. The company also fired top executives Kayvon Beykpour, a former director of consumer products, and Bruce Falck, chief revenue officer. Musk reportedly offered initial job cuts at his introduction to raise money for the company's acquisition, before increasing the workforce in subsequent years.
And on Tuesday, Coinbase, a cryptocurrency exchange, announced that it would reverse its aggressive hiring plans this year due to the recent market downturn.
“As we headed into this year, we had planned to triple the size of the company,” Emilie Choi, Coinbase's president and COO, said in a blog post. "Given current market conditions, we believe it is prudent to reduce hiring and reassess our staffing needs against our highest priority business objectives."
Uber CEO Dara Khosrowshahi also briefed staff on plans to cut expenses and treat hiring as a "privilege and deliberate on when and where we will add staff," according to an email seen by CNBC last week. Khosrowshahi cited a "seismic shift" in market conditions.
Although the reasons for the slowdown in hiring vary from company to company, many are proceeding cautiously given macroeconomic conditions and expectations of a recession later this year, said Jack Gold, founder and principal analyst at J. Gold Associates, LLC.
"Since these are public companies, they have to play the game of 'How did this quarter go?' and shareholders look very closely at expenses when sales aren't growing. So that's a big part of the pause/reduction in the hiring situation,” he said.
At the same time, he said, many big tech companies have added significant numbers of new employees over the past year or two during the pandemic as “sales grew and the market was up.
"So it's no surprise that they're in a hiring slowdown to be able to fully absorb new hires into the organization," he said. "It takes six to 12 months for new employees to be fully productive in the new jobs."
Other companies in the technology industry have gone further and decided to cut jobs. Amid declining subscriber numbers, Netflix is laying off 150 employees, or 2% of its US workforce, as well as 70 part-time positions, according to Variety.
E-commerce platform Robinhood laid off 10% of its workforce in April, while collaboration software provider Mural and online car dealer Carvana are among others that have recently downsized. More than 80 tech companies have laid off staff so far this year, according to layoff tracking site Layoffs.fyi.
Copyright © 2022 IDG Communications, Inc.