The parent company of Facebook adds its name to the long list of companies in a sector in the midst of a weight loss crisis.
Hardly a day goes by without an announcement of job cuts in an American tech company. Meta, the parent company of Facebook, has just formalized the loss of 11,000 jobs out of 87,000. “Today I’m sharing some of the toughest changes we’ve made in Meta’s history.said Mark Zuckerberg, its CEO, I have decided to reduce the size of our team by approximately 13%” and part with 11,000 of our talented employees. The group wants “concentrate its investments on a smaller number of areas”, he said recently. This vast layoff plan is a first in eighteen years of existence for Facebook’s parent company. It is even the most important plan announced by one of the American tech giants to date.
Even if, in percentage of the workforce, Twitter comes first. On Friday, the social network confirmed the elimination of half of its 7,500 jobs. If, for Twitter, the decision is consecutive to its takeover by Elon Musk, it is nonetheless symptomatic of an American tech sector in the midst of a slimming crisis. Since the beginning of the year, nearly 50,000 jobs have been destroyed in the sector.
Read alsoTwitter: Cryptocurrency giant Binance ready to back Musk
The contrast is striking. For nearly a decade, these companies have been hiring with a vengeance, spending blithely to flush out valuable talent from their competitors, generously increasing compensation. Silicon Valley companies did not hesitate to create jobs to anticipate their future needs. Thus, human resources departments have been massively reinforced to deal with waves of hiring that may never happen. American start-ups have long played the growth card, without worrying about profitability. Today, the situation has changed. The war for talent that was raging in the new technologies sector suddenly gave way to waves of layoffs.
SEE ALSO – WhatsApp suffered a global outage
profound change
It’s time to cut costs amid fears of a global economic recession. No more question of increasing the losses, it is necessary to save the available cash. The change is profound. Both private investors and shareholders want results: they no longer bet on growth prospects. The race for profitability is on.
To achieve this, these companies do not hesitate to decide on the spot. On November 3 alone, VTC Lyft announced the loss of 700 jobs, affecting 13% of its workforce, Dapper Labs, which creates NFTs for American basketball and football, fired 130 people. Stripe, a fintech specializing in online payment, has announced 1,100 job cuts. “We have been too optimistic in our forecasts for the online economy’s short-term growth”explained Patrick Collison, co-founder and general manager of Stripe in an e-mail to his employees, reports the New York Times. He added that he had “underestimated both the likelihood and impact of a global slowdown”. In the spring, Stripe applied a 28% drop to its valuation, from $95 billion to $74 billion. A correction at the height of the speculative bubble that had turned the heads of American investors and entrepreneurs last year.
Read alsoTwitter: Alone at the helm, Elon Musk leaves its mark on the social network
These companies have come to add their names to an already long list of start-ups that are massively poaching. No sector is spared. Aggravating phenomenon, large groups that do not lay off stop hiring. After Apple, it was Amazon’s turn to announce at the end of last week that it was ceasing to recruit in certain trades. A “pause” which should last “several months”clarified Beth Galetti, Amazon’s director of human resources, in an internal blog post.
The situation is the same in all Gafam: Alphabet, the parent company of Google, as well as Microsoft, have already announced that they are slowing down or even freezing hiring. The support functions and head offices of these large companies are the first to be affected by this diet. As a result, if a few months ago, disembarked employees could hope to find a job quickly, they now have fewer and fewer redeployment opportunities. The situation is all the more tragic as some have not set foot in the office since the start of the pandemic in the spring of 2020.
SEE ALSO – Twitter: management undertakes to lay off half of its workforce