The US distribution giant highlights an “unusual” macroeconomic environment.
Caught in the economic slowdown gripping the tech giants, two Silicon Valley companies, Stripe and Lyft, announced major layoffs Thursday, while Amazon maintains hiring at its offices. Twitter could follow suit: according to information from the Bloomberg agency, confirmed by a source to AFP, the new owner of the social network, Elon Musk, plans to lay off half of the workforce to lower costs.
Stripe, a payment services company based in San Francisco and Dublin, has already laid off 14% of its workforce, telling employees that they have “hired too much for the world we are in today,” according to a source. “We face persistent inflation, energy shocks, higher interest rates, shrinking investment budgets and scarcer funding for start-ups”explained general manager Patrick Collison.
Stripe has been “overly optimistic about the growth of the digital economy in the near term in 2022 and 2023”, he added. The group plans to return to February’s employment level, i.e. 7,000 employees. The chauffeur-driven car rental company Lyft announced in another press release the layoffs of 683 employees, or about 13% of its workforce.
Hiring freeze at Meta
“We are likely to face a recession in the coming year and the cost of carpool insurance is going up”, reasoned the co-founders of the company Logan Green and John Zimmer. Amazon also highlights a macroeconomic environment “unusual” to explain the temporary suspension of all employment in its offices. The group expects growth of 2% to 8% in the fourth quarter, which is quite weak by its standards.
The hiring freeze signals that the mood in the retail and consumer sectors is changing, says Neil Saunders, distribution specialist for consultancy Global Data. “The violent days of growth are now over and have given way to an environment where greater caution is needed to protect profits”, he said in a note. Another tech giant, Meta (Facebook, Instagram) is also moving up. Mark Zuckerberg, the company’s boss, indicated last month that the workforce should not increase by the end of 2023 or even decrease slightly. Meta had around 87,000 employees worldwide as of 30th of September.