According to a recent report by Bloomberg News, Apple recently laid off about 100 contract workers in its recruitment department. This is the latest sign that the tech sector is putting the brakes on hiring. Facebook’s parent company, Meta, along with Amazon (which is a marketplace underwriter), Alphabet, Microsoft, and several others made similar announcements this year.
By this year, tech companies had hired many employees. That’s partly because the pandemic has created a lot of demand for their products and services.
“During the pandemic, the strong in tech got stronger,” said Dan Ives, managing director at Wedbush Securities. “From an e-commerce [perspective]everyone is sitting at home and streaming to software, to the cloud.”
But that’s starting to change depending on the type of tech company, said JP Gownder of Forrester Research.
“There are companies that are legitimately having performance issues, there are companies that are just being a little cautious and slowing things down.”
Netflix, for example, is grappling with new competition, Gownder said; it laid off about 450 employees. Other companies worry about where the economy is headed and are therefore holding back hiring.
“In an environment of economic uncertainty, even large companies will say, ‘Hey, let’s wind down this particular part of our business because it’s not successful, and we expect it to be even less successful when the economy slows down,'” said Gownder.
Technology companies may also expect other companies to slow down their spending. In other words, ad revenue, said Carolina Milanesi, a tech analyst at Creative Strategies.
“Any social media platform or content platform, advertising is usually one of those things that companies kind of back off on,” she said.
After the tech hiring boom in recent years, Milanese said, we should expect that pace to slow.
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