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A Host of Tech Companies, Including Coinbase, Robinhood, Lyft, and Stripe, Announce Hiring Freezes and Job Cuts (nytimes.com) 61

The macro story unfolding today is all the layoffs taking place in the tech industry. "Tech giants including Meta and Amazon have been slowing down their hiring for months, while smaller tech companies such as Robinhood and Coinbase have announced layoffs," reports the New York Times. "But rarely have so many job cuts and hiring freezes in the industry been disclosed on the same day." From the report: The technology industry's slowdown came into even sharper relief on Thursday as Amazon publicly said it had paused hiring for its corporate work force and several other technology companies announced job cuts. [...] At the same time, Lyft said it would cut 13 percent of its employees, or about 650 of its 5,000 workers. Stripe, a payment processing platform, said it would cut 14 percent of its employees, roughly 1,100 jobs. [...] Tech companies have led the way for the U.S. economy over the past decade, lifting the stock market during the worst days of the coronavirus pandemic. But in recent weeks, many of the largest firms reported financial results that suggested they were feeling the impact of global economic jitters, soaring inflation and rising interest rates.

Social media companies in particular have been grappling with a pullback in digital advertising over the last few months. Meta, which owns Facebook and Instagram, said last week that its head count would remain "roughly flat" through the end of next year. The company plans to shrink some teams and hire only for high-priority areas. Snap, Snapchat's parent company, laid off 20 percent of its employees in August, blaming challenging macroeconomic conditions. Last week, Microsoft told investors that new hires in this quarter "should be minimal." Alphabet, which owns Google and YouTube, also said that in this quarter it would hire fewer than half the number of people it added in the third quarter.

More layoffs at tech companies are in the works. Elon Musk, who bought Twitter for $44 billion last week, has ordered cuts across the company, which employs about 7,500 people. Workers at Twitter have started circulating a "Layoff Guide" with tips on how to handle being laid off. On Thursday, Lyft said it had decided on layoffs in the face of "a probable recession sometime in the next year." All teams will be affected, said Logan Green and John Zimmer, the company's founders, in an email to employees. Over the summer, Lyft cut 2 percent of its employees, mostly as a result of shutting down its car rental business, and froze hiring. But the company still has "to become leaner," its founders said. It is "not immune to the realities of inflation and a slowing economy," which have led to increasing ride-share insurance costs. Lyft also said it planned to sell its first-party vehicle service business and expected employees on that team to be offered jobs at the acquiring company.

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A Host of Tech Companies, Including Coinbase, Robinhood, Lyft, and Stripe, Announce Hiring Freezes and Job Cuts

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  • business model (Score:4, Interesting)

    by awwshit ( 6214476 ) on Thursday November 03, 2022 @05:49PM (#63022861)

    A bunch of the companies listed do not have a functioning business model and have never made money. Should we be surprised that they are struggling?

    • It'd be a shame if they had to start working for a living.

    • Even if all these companies suck, the strong job market sure has been nice.

      Gen Z seems awfully unhappy with work already, it'll be interesting to see how they respond to not being able to walk out of one job right into another for the first time.

    • Yep, Going to be quite the blood bath. Having been through several of these. It is amazing that a bunch of really smart people can assume the rules no longer apply.
      Of course, the fed giving money at 0% to their banking buddies can distort things. But, I suppose there are some that are gone with their cash.
      rinse and repeat, rinse and repeat
    • by Tablizer ( 95088 ) on Thursday November 03, 2022 @06:19PM (#63022911) Journal

      NASDAQ is full of companies playing the high-risk-high-reward game. It's hard to know what will take off down the road.

      If you really believe you are smart at picking future winners and losers, then buy stock puts and shorts, and you can make money off their failure. When you become a zillionaire, I'll then listen to you.

      For example, I never thought Google would be able to unseat established search players like AltaVista, InfoSeek, Lycos, Yahoo, and others. Although Google's search worked well at the time, their technique was for the most part not secret and not patentable. Thus, I expected the big players to copy what worked for Google and had deeper pockets to execute it on a bigger scale. But Google somehow managed things better than the others. Looking at the product and market position alone doesn't tell the full story. And they may find a closely related niche and pivot their business model to something that takes off unexpectedly. They can morph.

      • I would say the same about Apple, especially how Apple went from making pretty colored computers in 2000 to being the main smartphone maker in existence. A company rarely gets to step in and completely seize an industry, and Apple managed to do that with two markets (MP3 players and smartphones), as well as make a notable presence in others.

        However, Apple is based from consumers rather than enterprises, so a deep recession which causes people to not bother buying the latest generation of phone, or gadget.

        T

      • Although Google's search worked well at the time, their technique was for the most part not secret and not patentable. Thus, I expected the big players to copy what worked for Google

        They could have copied Google, but they didn't. The prevailing belief was that curated "portals" like AOL were the future, and search was a dead end that would fade away as the portals improved.

        • by Tablizer ( 95088 )

          > They could have copied Google, but they didn't.

          Which is odd. There were 5 or so large search engines and none of them borrowed Google's technique (to any significance) even when Google gained clear momentum. I can understand 1 or 2 ignoring Google, but not 5.

          • by tlhIngan ( 30335 )

            Which is odd. There were 5 or so large search engines and none of them borrowed Google's technique (to any significance) even when Google gained clear momentum. I can understand 1 or 2 ignoring Google, but not 5.

            Not really. Look at Apple and smartphones.

            Pre-iPhone, we had Blackberry, Nokia Symbian, Microsoft Windows Mobile, and PalmOS as the main contenders for phone operating systems. When the iPhone came out, none of those companies took Apple seriously - Nokia laughed it off as a fad, and Blackberry igno

      • I distinctly remember sitting around the conference table among my research group in grad school as google was about to go public and discussing whether it would be wise either to get in on their IPO, or else to go work for them. The consensus was either would be a big gamble. Their unique IPO pricing mechanism seemed to reduce the amount it was likely to rise anytime soon, and that initial market cap seemed so high - $23 billion dollars for a search company? How much could it possibly go up from there?
      • Do you play poker?

        Counting on a pivot/morph to save a failing company is like holding a poker hand that is missing a card and hoping the card you need turns up.

        I didn't say anything about predicting the future, you can only lose money for so long before you need more and it is getting harder and more expensive to find money to burn.

    • Higher interest rates make it harder to justify continuing to shovel money into bullshit companies. This is entirely predictable.

    • by cstacy ( 534252 )

      A bunch of the companies listed do not have a functioning business model and have never made money. Should we be surprised that they are struggling?

      Uber's stock went way up just the other day. Unlike Lyft, Uber has never made a penny and they have no plan or path to profitability either. So, whothefuck knows what gives. But yeah the economy is in very bad shape, so no surprise some tech companies are reacting.

  • That companies who made most of their profits pumping worthless crypto and meme stonks are having trouble making money in a market correction? I'm stunned!

  • by headbulb ( 534102 ) on Thursday November 03, 2022 @06:11PM (#63022889)

    I'd argue that none of those are technology companies. We call too many companies that use computers technology companies.

    Sure they use or even develop software but it's for their own internal uses. They do not develop technology as an end product to sell. They sell a service.

  • by Anonymous Coward on Thursday November 03, 2022 @06:14PM (#63022899)

    They are shell games and "get rich quick" scams using a computer

    Good riddance to them all

    • indeed, anything having to do with "cryptocoin" or similar is just casino with digital tokens. Of course they will flop, and let's not even get into the "stablecoin" scams that back maybe a few percent of their coins "value" while the rest of actual money put into them go into pockets.

  • ...they're offshoring work.

    When everyone is remote, it doesn't matter if the dude is in a Bangalore slum, or a San Francisco apartment.

    • by Tablizer ( 95088 )

      SF's advantage is they have a big pool of smart people from all over the world who collaborate both formally and informally. India's guest worker program is too restrictive to duplicate that well. Plus, Bangalore is not exactly friendly to the uninitiated. China also tried to duplicate "The Valley" but failed because of the govt's insular and controlling nature.

  • All these tech companies that were focused on getting users dependent on them, so that they can jack up rates Uber style, are now starting to hurt due the Central Banks raising rates across the world. No more can they afford to burn billions and billions to prop up their failing business models.
  • It's funny (Score:5, Insightful)

    by quonset ( 4839537 ) on Thursday November 03, 2022 @07:44PM (#63023067)

    In the movie Sneakers, when Martin meets up with Cosmo at Setec Astronomy, they have a discussion about how to bring down a bank. Make people believe it's going under, people withdraw their money, and the bank goes under.

    In a similar vein, all these companies which keep saying they see bad things coming down the pipe are now setting conditions to have bad things come down the pipe. Stop hiring, fire people, and others will believe things are going to get bad which will, eventually, turn out to be true.

    As an aside, it should be noted not a single CEO or head of company has said they're having their salary and perks cut to help save money. Nor have these same companies stopped buying back stock to the tune of billions of dollars.

    • It's on purpose. Wages have been climbing up. The goal here is to do Mass coordinated layoffs so that workers will take lower pay and new jobs or work unpaid overtime if they survive.

      This isn't me being a commie pinko Lefty this is literally what the head of the American Federal reserve has said his stated goal is. Senator Elizabeth Warren just came out finally and asked him how many jobs he plans to kill.

      It's basically like opec. If all the CEOs get together like a cartel and agree to do Mass layof
  • I'm always reminded of a quote from Warren Buffett where he said there is a class war and my class is winning.

    Employees, which is most of the people on this forum, got a teensy tiny bit of bargaining power because of the large number of baby boomers who either died or retired in the wake of covid.

    Now the ruling class wants that power back. Liz Warren finally came out and asked Jerome Powell how many jobs he's going to kill. I'm not expecting an answer and I don't think she is either.

    I understand
  • It make sense for an Amazon to freeze or slow hiring in the face of a slowing economy. If the workload lessens the current workforce can handle it and it avoids future layoffs. With Amazon, it's corporate hiring that is frozen, distribution appears to be still growing; so the focus is sharper than the old "hire cause we may need them later and might not get them" mode. At least Amazon has a viable business model that can adjust to the market.

    Coinbase, Robinhood et. al. were just shots in the dark in hope

    • Amazon has ongoing continual layoffs all the time. They just call it performance management. They'll be hiring again soon enough, once wage pressure eases a bit more, in order to replace the people they are constantly firing or driving out of the company.

  • Musk will be dealing with a huge lawsuit over the short notice on firing. So heâ(TM)s going to pay the RSUs heâ(TM)s trying to avoid plus the additional costs for breaking California law.

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