Technology

Why did Facebook, Amazon and Twitter stop their hiring of personnel?

Amid Elon Musk's announcements about a possible purchase of Twitter, the social network decided to suspend non-essential hiring.  /Bloomberg

Amid Elon Musk’s announcements about a possible purchase of Twitter, the social network decided to suspend non-essential hiring. /Bloomberg

Photo: Gabby Jones

Several US technology companies such as Facebook, Uber, Amazon or Twitter are slowing down their hiring because the sector, with good results in the pandemic, is going through a difficult period.

On the sidelines of the publication of the quarterly results of the groups listed on Wall Street, several announcements were made.

During a phone call with analysts in late April, David Wehner, the chief financial officer of Facebook parent Meta, referred to an “adjustment” in hiring targets.

“We periodically reassess our talent pool based on our business needs,” a Meta spokesperson said.

“We are slowing growth [de la contratación] in light of our cost forecasts, communicated in our latest results”, he added, specifying that the long-term objective was still to increase the group’s workforce, which employed 77,805 people at the end of March, 28% more than a year ago. anus.

Another tech giant and the second-largest employer in the United States behind Walmart, Amazon, suggested that no additional staff would be hired anytime soon. The company had 1.6 million employees at the end of 2021, more than double the number in 2019.

“When the variant [ómicron] decreased in the second half of the first quarter and employees came back from vacation, we quickly went from being understaffed to being overstaffed,” said group CFO Brian Olsavsky.

See: Why did Elon Musk suspend the purchase of Twitter?

Amid Elon Musk’s announcements about a possible purchase of Twitter, the social network decided to suspend non-essential hiring.

As for Uber CEO Dara Khosrowshahi, he wrote in an email to company employees published by CNBC that new hires should be “treated as a privilege.”

Inflation

The reasons for these employment freezes vary from company to company. Facebook, for example, points to the impact on its ad revenue of Apple’s new rules on data sharing.

Twitter, meanwhile, is mired in a wave of uncertainty following Musk’s spin on buying the company, and Uber is suffering heavy losses from its investments in several start-ups with shaky financial health.

But there are also common factors, such as the end of the lockdown economy and the progressive lifting of health restrictions.

Also read: Twitter shares plummet on news that Musk will suspend his purchase

“Many technology companies have responded to the growing demand for digital services by contracting and growing their business in the last two years,” says Terry Kramer, adjunct professor at the UCLA business school, citing the emblematic case of the video conferencing platform Zoom.

“A lot of what we’re seeing right now is a phase of tech maturity where these companies can’t and don’t need to keep growing at the same rate,” Kramer continues.

Another factor that weighs on the sector is the continuous and high inflation. Rising prices put pressure on the US central bank (Fed) to raise interest rates, hampering companies’ ability to borrow, a particularly unfavorable situation for tech companies.

“Many companies that bet on a growth strategy, without expecting short-term profits, thought they could continue to get money through the stock market or private investors,” explains economic forecasting expert Daniil Manaenkov of the University of Michigan.

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