Evidence of impending recession is seen in Silicon Valley. Apple Inc. is the latest technology major to join the bandwagon and put lids on hiring and spending plans.
The iPhone maker is looking to curtail expenditure and limit job growth in some of its units. As per Bloomberg News, the tech giant has not adopted a companywide policy. The cautious approach mimics other tech peers such as Microsoft Corp., Amazon Inc., and Alphabet Inc., which have taken steps to slow down spending.
The news and increased fear surrounding the tech earnings for this season sent the stocks sliding. The results expected to be announced this week may become difficult for companies to calm jittery investors. IBM Corp. saw its shares slip Monday in late trading despite better than estimated sales growth.
Impending Slowdown
The giant tech companies are not talking about eliminating jobs but only slowing hiring. June saw the payrolls increase by 372,000, beating the estimates of 265,000, with the manufacturing sector boosting the numbers. Information jobs added 25000 in June, making them 105,000 higher than pre-pandemic numbers.
Some tech companies like Microsoft are cutting jobs. Microsoft is eliminating specific positions as part of the restructuring. The reduction is only 1% of the 180,000 workforces, with Microsoft expecting an increase by year-end. Microsoft slowed hiring in its Windows, Team, and Office divisions in May.
Last month, Tesla Inc. closed its autopilot self-driving technology facility in California and laid off thousands of workers.
CEO Musk said earlier that layoff was necessary for the unstable economical environment. He clarified to Bloomberg that around 10% of the salaried staff would lose their job in the next three years. The overall headcount at Tesla could be higher next year.
Pandemic Highfliers Peloton Interactive Inc. and Netflix Inc. have also laid off staff recently. In June, Netflix trimmed a few hundred jobs while Peloton announced the closure of its in-house manufacturing.
Meta Platform Inc. plans to cut spending and slow down senior-level hirings. In April, the company announced its plan to cut expenses by 43 billion this year.
Sundar Pichai, CEO of Google, said last week that the company was planning to slow hiring in 2022 remainder. This is rare for the internet giant as it typically hires thousands of employees yearly. The company is focusing on hiring in the technical and other critical roles.
Amazon had staffed up during the pandemic to cope well with the surge in e-commerce spending. Now they have surplus staff in their warehouses, which they now want to solve with layoffs. It has also subleased warehouses and paused office space development while working on how much the hybrid workspace will be required. CEO Andy Jassy says Amazon decided on too many hirings and warehouse space during the pandemic.
