Companies from ride-sharing platforms to mighty Amazon are cutting jobs or suspending hiring plans as the U.S. economy slows.
Lyft said in a regulatory filing on Thursday that it was cutting 13% of its workforce, or nearly 700 employees, as it moved to cut costs. The money-losing ride-hailing service has seen sales decline over the past year, while its shares have fallen 67% in 2022.
Stripe, a payment service provider, also announced layoffs on Thursday, saying it was cutting 14% of its workforce, or about 1,000 employees. In an email to employees posted on Stripe’s website, CEO Patrick Collison said the company was bracing for “more challenging times” amid deteriorating economic conditions.
“We face stubborn inflation, energy shocks, higher interest rates, shrinking capital budgets and scarcer start-up funding,” he wrote.
Stripe said it will offer a minimum of 14 weeks of severance pay to all terminated employees, and more to those with longer tenure.
Twitter is another big tech company looking to cut costs. Bloomberg News reported that Elon Musk, who has reached an agreement withlast week for $44 billion, about half of its workforce.
The Tesla CEO wasted little time cleaning up the house, preparing to fire Twitter’s CEO, CFO and top lawyer hours after taking over, while other team members from company management have also left.
Also working to contain costs, Amazon executives are freezing the hiring of their enterprise staff for at least the next few months, said Beth Galetti, senior vice president of people experience and technology. , in a note posted on Amazon’s website on Thursday.
“We face an unusual macro environment and want to balance our hiring and investments while being mindful of this economy,” she said.
The National Association for Business Economics recently predicted that the United States would enter a recession.
Despite rising tech layoffs and economic challenges affecting millions of Americans, unemployment in the United States remains near its lowest level in five decades, at 3.5%. Employers across the country postedin September, compared to 10.3 million in August, the Labor Department announced on Tuesday. And despite the plethora of layoff announcements at companies, the number of workers applying for unemployment aid remains low, suggesting that even laid-off workers are finding new jobs fairly quickly.
“There’s a bit of white-collar panic,” said Julia Pollak, chief economist at ZipRecruiter, calling out the finance, technology and advertising sectors. “Companies are sitting on piles of cash and are very conservative, they’re trying not to over-hire. They’re probably not going to expand, open new locations just yet, and the big ribbon cutting will probably be postponed. another year.”
“We still have this incredible job market and an incredible shortage of candidates, but this gap between demand and supply is narrowing,” she added.
The government is due to release its October jobs report on Friday.
— The Associated Press contributed to this report.