Since the beginning of the year, several tech giants have announced a slowdown in their recruitment, and even layoffs.
End of the health crisis, war in Ukraine, inflation and the specter of an imminent recession in the United States. With an uncertain economic context, the tech giants fear for their growth prospects.
The sector had grown accustomed to insolent growth over the past decade. Apple, Microsoft and Amazon are thus 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 massively. 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 a collective total of around 563,000 employees. calculated the Wall Street Journal. Amazon alone employed more than 1.6 million people worldwide at the end of 2021.
But since the beginning of the year, several of them have announced a slowdown in their recruitment, or even layoffs. These announcements, if they reflect a slowdown, should be put into perspective.
Figures released Friday, July 8 by the US Department of Labor show that the sector still 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 of the various announcements.
Netflix loses subscribers and lays off
Dark period also for Netflix. Launched in 1997, the video-on-demand platform lost subscribers – 200,000 – for the first time in its history during the first quarter of 2022. A fall that continued in the second quarter with nearly a million fewer subscribers.
This loss of speed comes after massive investments by Netflix in the production of content in order to maintain its position as world leader in the video streaming market, while new players have appeared, 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 all-time high in November 2021, its valuation has fallen by more than 70%.
Microsoft lays off but promises recruitment
Without providing specific figures, Microsoft says it laid off July 11 “less than 1%” of its workforce of 180,000 employees, reported Bloomberg. The layoffs concern several services, in particular that of “advice and solutions for customers and partners”, and are spread over several geographical areas, the IT group told Bloomberg.
These dismissals come as the group closed its shifted fiscal year at the end of June. Microsoft, however, said it wants to continue hiring in other positions and end the current fiscal year with an increased workforce by June 2023.
Shopify bears the brunt of the pandemic
Based on consumer trends linked to periods of confinement, Shopify made a bad bet. The online sales platform therefore laid off 10% of its employees on July 27, or around 1,000 people. Despite regular use of the service during the Covid-19 pandemic, consumers have not changed their habits enough to justify the recent hiring of the Canadian company.
Twitter continues cost hunt
The social network announced in early July to lay off 30% of its human resources teams, the equivalent of a hundred people. The American company had already announced in May that it would take a break in its recruitments. The objective: 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 abortion of the transaction, Twitter specified in a document that it did not envisage layoffs, but wanted to continue its cost hunt, explains Reuters. In an internal memo consulted by the Wall Street Journalthe company wrote in May of its intention to reduce its expenditure on external resources such as consultants, but also its expenses for travel and events, marketing, real estate, infrastructure and other operational costs.
TikTok launches an “internal restructuring”
TikTok is revising its needs downwards. Just under 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 do not contribute enough to the company.
A former employee who left earlier in the year links this decision to the abandonment of the TikTok Shop shopping service. The restructuring must affect the United States, Europe and the United Kingdom, which have at least 10,000 employees according to the American magazine.
Google will slow down hiring
No layoffs in sight at Google, but reductions in hiring during 2022. In an email sent to employees on July 12, CEO Sundar Pichai explained that the group will “slow down the pace of hiring for the rest of the year “, reported the Wall Street Journal.
Google recruited about 10,000 new employees in the second quarter and recruitment is still underway this quarter, said the CEO.
“To move forward, we need to be more entrepreneurial, work with greater urgency, sharper focus and more aggressiveness than we have shown on better days,” he said. writes 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, it means pausing deployment and redeploying resources to higher priority areas.”
Facebook puts pressure
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 in 2022, against the 10,000 positions initially budgeted.
Beyond lowering its job openings, Meta will intentionally leave jobs vacant. The objective clearly assumed: to increase the pressure on the performance indices, in order to oust those unable to achieve these new objectives.
At Uber, hiring will be a “privilege”
Same story at Uber. App CEO Dara Khosrowshahi said internally that the company will “treat hiring like a privilege,” the app reported. Wall Street Journal may’s beginning.
Launched in 2009, the VTC application (car reservation with driver) is still not profitable. It is seeking 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 tightens its belt
With a more challenging second quarter of 2022 than expected, Snapchat did not achieve its objectives. After the announcement of the results on July 21, the action of the company made a fall of 25%, specifies CNN.
However, the boss had warned in May that the results would not be 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 departures.
Despite rising results, Spotify is also pulling the handbrake
While the leader in audio streaming is still showing strong growth, it announced in mid-June a 25% drop in recruitment this year.
This announcement is more a measure of anticipation than reaction, as justified by the group’s financial director Paul Vogel, during the presentation of the quarterly results to investors in June:
We are aware of the growing uncertainty in the global economy. And while we have not yet seen a concrete impact on our business, we are closely monitoring the situation and reassessing our growth in our short-term workforce.”