US tech layoffs skyrocket as companies struggle with shrinking global economy

The funding winter, soaring inflation, and fears of an imminent recession are hitting tech companies hard across the globe.

Sackings have intensified over the past few days with several foreign startups, including Stripe, Lyft and Opendoor announcing layoffs.

Amazon, meanwhile, has announced it is freezing hiring in its corporate workforce.

Over the past couple of months, other Big Tech firms such as Alphabet, Apple, Microsoft and Uber have either paused hiring or started handing out pink slips to their employees to cut costs and maintain positive operating margins.

Their woes have been compounded by disappointing earnings, dwindling ad revenues and tapered guidance figures, which have led to a significant rout in their stock prices.

Here are some of the tech companies that have announced layoffs in the past few days.

Lyft: The ride-hailing company said it would fire 13% or nearly 700 employees to cope with the weakening economy. Earlier this year, it had sacked 60-odd employees and frozen hiring. “The announced reduction in force is a proactive step as part of the company’s annual planning to ensure the company is set up to accelerate execution and deliver strong business results in Q4 of 2022 and in 2023,” Lyft said in a statement.

Stripes: The digital payments giant, which was valued at $95 billion in its last funding round, is cutting its headcount by about 14%, leaving it with about 7,000 employees. “We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” Stripe’s founders said in an email.

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open door: Real estate firm Opendoor will let go of about 550 people or 18% of its staff across all functions, its cofounder and CEO Eric Wu announced in a blog post on Wednesday. This comes on the back of peaking US mortgage rates and inflation, leading to decreased demand. “Prior to today, we scaled back our capacity by over 830 positions – primarily by reducing third-party resourcing – and we eliminated millions in fixed expenses. We did not make the decision to downsize the team today lightly but did so to ensure we can accomplish our mission for years to come,” Wu wrote.

chime: One of the largest fintech firms, Chime said it will sack 12% of its 1,300 workers. However, the company said it was still hiring for select positions and remained well capitalized. “The changes will help, but we also need to adjust the size of our organization as we increase our focus and forge our path to profitability,” cofounder Chris Britt wrote in a memo.

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Amazon: Although Amazon has not decided to trim its headcount as of now, it is pausing “new incremental” hiring across its corporate workforce. “We anticipate keeping this pause in place for the next few months, and will continue to monitor what we’re seeing in the economy and the business to adjust as we think makes sense,” the firm’s top human resources executive Beth Galetti wrote in a blog post.

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