After adding jobs at a rapid pace for several years, some of America’s fastest-growing companies have indicated in recent weeks that they plan to take a more cautious approach to bringing in new workers. The turnaround by these technology giants raises questions about the direction of the overall US job market and comes during a period of stock market volatility amid concerns over rising interest rates.
Economists cautioned that, overall, the job market remains strong, with the unemployment rate at 3.6% in April, layoffs at a historically low level and many companies still eager to bring in more workers – if they can find them. can. While employment in the tech sector has grown rapidly and competition for talent has intensified across the country, the industry will employ about 8.7 million people at the end of 2021, or 5.7 of the total US workforce, according to industry trade group CompTIA. % is.
“The slowdown in hiring at some companies suggests that executives are hesitant to take more risk and are less prepared to tolerate growth at all costs,” said Julia Pollack, chief economist at job site ZipRecruiter. Epidemic; Maybe they pushed a little further.”
The changing technology hiring landscape has worried some workers, who have expressed concerns about canceled offers or difficulties getting hired on sites like LinkedIn. While some large technology companies have announced layoffs, many have said they want to do more to reduce spending. Facebook’s parent Meta Platforms Inc. said last week that it would sharply slow down its hiring after more than double its workforce since 2018.
Twitter CEO Parag Agarwal told employees in a memo on Thursday that the company would stop hiring and review job offers to candidates. Mr Agarwal said Twitter, which has agreed to be acquired by Elon Musk for $44 billion, plans to spend less on contractors and consultants, travel, marketing and other costs.
Uber CEO Dara Khosrowshahi told employees in a note this month that the company will treat “hiring as a privilege” and will hold more discussions about when and where it adds new employees. . Mr Khosrowshahi said the company needed to focus on profitability, and that market and investor sentiment had changed.
Some companies that grew earlier in the pandemic have been in trouble. Online car dealer Carvana Company told employees that the company will cut 12% of its workforce, or about 2,500 employees. Fitness-equipment maker Peloton Interactive Inc. said in February it would cut 2,800 jobs, including about 20% of its corporate positions.
Vinod Khosla, a leading venture capitalist, said that in smaller companies and startups, many entrepreneurs will be more prudent about how to spend their company’s cash in an era when it is not easy to raise large sums of money quickly. He said this could make some CEOs think differently about whether to add new positions or expand their teams.
“There is definitely a caution among smart entrepreneurs,” said Mr. Khosla. “Entrepreneurs are very smart. When capital is cheap, they waste it,” spending a little more to gain an advantage over a rival or to increase their size. market, he said.
In contrast, now, “less money will lead to capital efficiency,” Mr. Khosla said.
Shifting focus goes beyond technology. At Scotts Miracle-Gro Co., CEO Jim Haddorn told investors last week that the company aims to reduce its overhead expenses by about 10% before the next fiscal year. Mr Hegdorn said the company would “run more thin” and “be more mindful of redundant roles, processes and other structural issues that could lead to inefficiencies.”
Among entrepreneurs, there have been several conversations lately about conserving wealth, said Maria Colacursio, chief executive of technology company Cindio Inc., an analytics platform that helps employers identify and correct pay discrepancies. “Everyone’s going on the runway, conserving cash, ‘I don’t want to raise money in this environment,'” Ms. Colacurcio said. “That’s what my co-workers are set on, what they’re all talking about.”
But Ms. Colacursio said she has seen some of her company’s big-employer clients hold back from hiring, and added that her own company, which employs about 150, still employed more than 30 people by the end of the year. planned to appoint.
ZipRecruiter’s Ms. Pollack said that across the economy, job growth in white-collar businesses, manufacturing and other industries remains strong. “Employers are in no hurry to get rid of workers. On the contrary, they are hungry for new candidates and they are holding the workers for dear life,” she said.
Still, moves by large, well-known technology companies are likely to attract attention and have a major impact on sentiment about the job market, especially in an environment when many are concerned about what’s next for the economy. he said.
“People are panicking,” she said, “and they’re looking for all the signs and signs of what’s ahead.”