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Paris (AFP) – 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. Although the determinations of each of the companies are different to have made this decision, one of the common factors that experts agree influences it is high inflation.
On the sidelines of the release of the quarterly results of the Wall Street-listed groups, several announcements were made. During a phone call with analysts in late April, David Wehner, the CFO of Facebook parent Meta, referred to an “adjustment” of recruitment targets.
“We periodically reassess our talent pool based on our business needs,” a Meta spokesperson told AFP.
“We are holding back the growth in hiring 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.
Another tech giant, Amazon, the second-largest private employer in the United States behind only Walmart, suggested that no additional staff would be hired immediately. The company had 1.6 million employees at the end of 2021, more than double the number in 2019.
“When the omicron variant declined in the second half of the first quarter and employees came back from vacation, we quickly went from being understaffed to overstaffed,” said group CFO Brian Olsavsky.
For its part, amid the announcements of the South African tycoon Elon Musk about a possible purchase of Twitter, which is currently on pause, 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 US broadcaster CNBC that new hires should be “treated as a privilege.”
Inflation, among the consequences of these decisions
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 in the midst of 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.
“Many technology companies have responded to the growing demand for digital services by hiring 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 Federal Reserve (Fed) to raise interest rates, hampering companies’ ability to borrow, a particularly unfavorable situation for tech companies.
“Many companies that went for a growth strategy, not expecting short-term profits, thought they could continue to make money through the stock market or private investors,” explains economic forecasting expert Daniil Manaenkov of the University of Michigan.
with AFP
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