More and more big technology companies freeze hiring: the economic crisis threatens the Great Renunciation

The hiring fever that the big technology companies have starred in the last two years, especially in the United States, is slowing down and threatens to stop in the coming months. Some of these companies have already frozen the arrival of new workers, such as Facebook or Twitter, and in others the threat of layoffs has been felt in recent weeks, such as Amazon.

talent war. In recent years, and especially as a result of the pandemic, the big technology companies have been powerful sources of qualified employment. The constant expansion of their businesses and the development of new products and services have meant that they have increasingly needed more labor, which has led to a war for talent that is at the origin, among other factors, of the Great Resignation that is taking place in various countries, with special incidence in the United States.

And Amazon, in addition to fighting for qualified ICT workers like the rest of technology companies, has also become the second largest private employer in the world, according to Fortune magazine, with almost 1.3 million professionals on the payroll. Largely due to the need for logistics personnel for its warehouses due to the increase in sales of its electronic commerce during the pandemic.

The euphoria fades. However, the good economic results that most of the big technology companies registered during the last two years are beginning to slow down, especially due to the economic uncertainty that currently shakes the West due to widespread price inflation and political instability. arising from the war in Ukraine.

For this reason, several of these large technology companies have already put the brakes on hiring and others have begun to fire, since, although they continue to earn a lot of money, their profits are being reduced at an accelerated rate and they have chosen to take preventive measures to try to stabilize your bills before they get any worse.

Goal. Meta has been one of the first to freeze its hiring due to the sharp reduction in its benefits in the last two quarters, as we have in Xataka. A decision of great importance for the future of a company that is immersed in the colossal project of developing the metaverse, for which Mark Zuckerberg said he would need at least 10,000 new workers. The brake on hiring, therefore, will delay the arrival of the new business of the old Facebook, and perhaps even put it in danger.

Uber. Another company that has stopped the arrival of new employees in its tracks is Uber, whose managers sent an email to their current workers explaining that from now on they were going to treat hiring as a privilege, according to CNBC. Which means they will be much more restrictive when their various divisions ask management for more budget for new staff.

The reason for this hiatus on hiring is the same as Meta’s: Uber shares are down 45% since the start of 2022, and its investors are pretty unsettled. The urban mobility company has also said it will eliminate marketing expenses and employee incentives they deem superfluous.

amazon. Amazon, for its part, has not said it will freeze hiring, but in its latest quarterly earnings announcement, its chief financial officer, Brian Olsavsky, said the company had hired warehouse staff too quickly during the pandemic to cope with the surge. of the activity and cover the casualties of workers infected by the coronavirus, according to the washington post.

Now that high volume of sales has subsided and Amazon believes it doesn’t need as many logistics workers, casting the shadow of the layoffs over the workforce of the world’s second-largest private employer.

However, although Amazon argues that it no longer needs so many workers, much of the blame for its thinking about layoffs lies with the fact that the company has recorded its worst quarterly balance sheet in 20 years during the first three months of 2022.

Twitter. The latest to join a review of its hiring policies has been Twitter. In an internal statement, to which has had access to the Wall Street Journalits still CEO, Parag Agrawal, explained to his workers that the decline in advertising revenue due to the global economic situation and the uncertainty faced by the company due to its sale to Elon Musk, not yet closed, have led those responsible to stop most hiring, except for critical positions.

Layoffs already completed. Two big tech companies that have already tackled layoffs are Netflix and Robinhood. The streaming platform fired a significant number of employees at the end of April (the exact figure is unknown) shortly after it became known that it had lost subscribers for the first time in a decade, according to Bloomberg. The investment app, for its part, also reported at the end of April that it was going to lay off approximately to 9% of its staff.

Repercussions for Spain. The sudden halt in the hiring of large technology companies could fully affect our country in the short and medium term. For a start, Amazon has about 12,000 employees in Spainan important part of them in logistics, so the layoffs that the financial director of the e-commerce giant raised a few weeks ago for its warehouse workers could directly affect the Spanish workforce.

In addition, Amazon announced in 2021 that it would continue to expand its workforce in Spain in the coming years with 3,000 more permanent jobs, a plan that is now up in the air.

Meta, for its part, also recently announced that it planned to hire some 2,000 workers in Spain in the coming years to address the development of the metaverse, something that is also on hold now that it has decided to freeze the arrival of new employees.

End of the Great Renunciation? The freezing of hiring by large companies such as those we have mentioned could be the beginning of the end of the phenomenon of the Great Resignation, which has been largely caused by the increase in jobs from 2021, especially in USA.

With fewer opportunities in the market, offers may no longer be as competitive as to entice professionals to leave their current role, and fewer openings may make many employees think twice about quitting.

Image | Sigmund