The Wall is Coming: The Times’ High-Attrition Expansion Revives Apple and Amazon Big Tech to Achieve More Jobs during the Fourth Quarter
The report doesn’t specify which class of employees had the highest attrition rate, but it’s well known that Amazon’s warehouses and other fulfillment facilities have more turnover than the rest of the industry. According to a report from The New York Times, around three percent of the company’s hourly employees left each week, and leaked internal memos obtained by Recode show that the company is worried about literally running out of people who’d be willing to work for it within the next few years (and even sooner, in some areas).
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Friday’s jobs report came in strong: the US economy added 261,000 new jobs in October, blowing away analyst expectations of 200,000, even as unemployment ticked up to 3.7%.
Other big tech companies, including Amazon, Apple and Google, are now pausing or slowing hiring amid recession fears after a wave of expansion. Amazon, in particular, had seen breakneck growth during the pandemic, doubling its fulfillment centers in a two-year-period, only to shift earlier this year to focusing on “cost efficiencies.”
▸ Amazon
(AMZN) announced on Thursday that it is pressing pause on corporate hiring. Beth Galetti, senior vice president of people experience and technology at Amazon wrote in a note that she was anticipating keeping this pause for the next few months, and would continue to monitor what we're seeing in the economy and business to adjust as we think makes sense.
Last year, Amazon was the latest Big Tech company to watch growth slow down from its pandemic-era tear, just as inflation being at a 40-year high crimped sales.
▸ Apple
(AAPL) has reportedly instituted a hiring freeze of its own in all areas except research and development. Apple will continue to hire and is confident in its future but it is taking a very deliberate approach in some areas, according to a statement from the company.
Some tech companies worry about slower growth during the holiday season, while Apple is concerned about rising interest rates and waning consumer spending. Covid lockdowns in China are also hurting production of the iPhone 14. Apple stock is down about 25% so far this year.
On Meta’s Layoffs, Lyft, Peleton, Stripe, and Wall-to-Consider Peleton: Are They Over?
Zuckerberg said Meta’s layoffs would be spread throughout the company, including impacting both its family of apps and the Reality Labs division that is tasked with helping build the metaverse. He noted that some teams will be adversely affected more than others.
In announcing the layoffs, Lyft said in a filing it will incur restructuring charges of up to $32 million. According to the memo, the founders wrote that they are not immune to inflation and a slowing economy. Shares of the car-share company are down nearly 70% so far this year.
Last month, home fitness company Peleton — which had been embraced by investors during the pandemic — underwent its fourth round of layoffs in 2022. Last week, payment-processing giant Stripe said it was eliminating 14% of its staff. Musk bought the company for $42 billion, which was funded with debt financing.
Jack Dorsey, co- founder of the company, who ran it until late 2021, took responsibility for the situation in a contrite thread. “I grew the company size too quickly. I apologize for that, that’s what I said.
More bad news for social media after Musk becomes a tech giant: What we can do to stop rail strikes and slowdown in the U.S.
The numbers of jobs and earnings show that the economy is strong. But other companies won’t be immune to the softening demand from consumers and businesses that tech companies have noted.
More bad news for the social network. There has been a big drop in revenue at the company as advertisers decide to stay away due to Musk’s controversial acquisition of the company.
He attributed the decline to “activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists.”
General Mills
(GIS) and Volkswagen Group, which owns Audi, Porsche and Bentley, have confirmed to CNN that they’ve paused their paid activities on the platform in the wake of Musk’s takeover. It is believed that Mondelez International and Pfizer have joined that list.
The Anti-Defamation League, Free Press, and other groups have increased their pressure on brands to rethink advertising on social media site, twitosphere. The groups pointed to Friday’s mass layoffs of Twitter staff as a key factor, citing fears that Musk’s cuts will make it difficult to enforce Twitter’s election integrity policies along with other anti-hate speech policy.
Walsh said his goal is to get those two unions back at the table with companies. He said a negotiated agreement would be “the best thing we can do is avoid any type of rail strike or slowdown.”
If any rail unions were to go on strike, all the rail unions — which together represent about 110,000 members — would honor their picket lines and refuse to work.
It would be bad news for supply chains. About 30% of US freight moves by rail. If trains stop, the prices of goods would go up. In addition, factories could be forced to shut temporarily due to parts shortages. Goods that consumers want to buy during the holiday season could be missing from store shelves.
Facebook Turns Things Around: Twitter CEO Mark Zuckerberg and the Silicon Valley Tech CEO Patrick Collison apologize for the 20th Anniversary of the Pandemic
In the early months of the epidemic, Facebook became more and more central to our lives. With lockdowns spreading, countless people began shopping, socializing and working on Facebook and other online platforms. As CEO Mark Zuckerberg said in March 2020, usage was so high that the company was “just trying to keep the lights on.”
More than 11,000 employees were laid off on Wednesday, making it the largest cut in the company’s history. In a memo to staff, Zuckerberg coughed up some of the hardest words in the English language. He said he took responsibility for the mistake.
The tech industry, already seemingly invincible in early 2020, only grew more dominant during the pandemic while other parts of the economy were upended. People shifted their spending online. The Federal Reserve maintained near-zero interest rates at the time, giving tech companies easier access to capital. The private and public market valuations for tech companies seemed higher than usual.
Silicon Valley operates on many myths, but one of them is the idea of the founder as a visionary who can see key trends coming years if not decades out. There is a growing list of tech leaders who are cutting costs and issuing mea culpas after forgetting to anticipate a whiplash in the market.
Many consumers have decided to return to their offline lives after the world reopened. While high inflation and fear of a looming recession have cut into consumer and advertiser spending, their impact on the core businesses of tech giants is still being felt.
Patrick Collison, CEO of Stripe, one of the most valuable startups in the world, similarly told employees that leadership takes responsibility for the pandemic-era miscalculations that resulted in people losing their livelihoods.
John and I are responsible for the decisions that led up to this step, and we are very sorry to those of you who are leaving. We underestimated both the likelihood and impact of a broader slowdown, and were too optimistic about the internet economy’s near-term growth.
Roger Lee, a startup founder based in San Francisco, has been closely tracking layoffs in the tech industry since the onset of the pandemic via his website Layoffs.fyi. Initially, his goal was to keep track of staffing reductions and look for candidates to join his company, a digital 401(k) provider for small businesses. The laid off workers started submitting their own data and making spreadsheets to use on his website in order to get recruiters attention.
Lee said some of the biggest trends he’s been seeing recently are major job losses across recruiting, human resources, and sales teams. While “engineers are still in better shape relative to the other roles,” Lee said his data indicate even these positions have suffered cuts in recent months.
Already, there’s been a clear shift in the industry’s mood. Blind, a popular online forum that lets employees at major companies commune anonymously to share interview tips and brag about compensation packages, has emerged as a sobering forum where people are posting about layoffs rather then their jobs.
Some laid-off workers are also banding together on social media and crowdsourcing spreadsheets for recruiters. Hundreds of names and profiles have been created by these workers who created documents to show former workers in Meta andTwitter.
Source: https://www.cnn.com/2022/11/10/tech/tech-layoffs-analysis/index.html
How Amazon Stores and Meta are Fueling a Snowball? A Comment from John Roussanov on the Impact of a Global Economic Inflationary Season
Roussanov, who is a professor of finance at the Wharton School, said that no company is unaffected by a storm even if it is better equipped than others.
The market cap of Meta has fallen from more than $1 trillion last year to less than $300 billion. Amazon’s market cap has decreased by $1 trillion from a peak last summer.
Roussanov said current fears of a recession are not unwarranted, but in many ways, “there is a little bit of a self-fulfilling nature to this.” He said: “They slow down people’s consumption, slow down firm investment and that kind of snowballs on itself as they become more and more widespread.”
Several teams will be affected, including the human resources department and Amazon Stores, according to a memo from CEO Andy Jassy shared with employees.
Andy Jassy wrote in a post that the staff reductions were set off by the uncertain economy and the company’s rapid hiring for several years.
This year, however, the company is confronting a shift back to in-person shopping as well as surging inflation that has sharply reduced consumers’ demand.
While 18,000 is a large number of jobs, it’s just a little more than 1% of the 1.5 million workers Amazon employees in warehouses and corporate offices.
Amazon’s hiring woes and its impact on laid-off employees: a note to CEO Jacob Jassy in a blog post
The scaling back was attributed to the fact that the boom times made the company hire too much. And now that the there has been a pullback in corporate spending, the focus is on cutting costs.
“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing,” Benioff wrote in a note to staff.
Amazon’s bottom line exploded as people avoided shopping in stores and shifted their purchases online, and as businesses and governments moved their operations online due to the need for cloud storage. And that, in turn, led Amazon to go on a hiring spree, adding hundreds of thousands of jobs over the past several years.
CEO Jassy, in his blog post, acknowledged that while the company’s hiring went too far, the company intends to help cushion the blow for laid off workers.
“We have packages that include separation payment, transitional health insurance benefits, and external job placement support available to those who are affected,” Jassy said.