Major Tech Firms Cut Jobs, Freeze Hiring Thanks To Fears Of Economic Downturn

By John Hugh DeMastri for Daily Caller News Foundation

Ridesharing app Lyft and payment processing startup Stripe informed their staff of layoffs Thursday in part due to expectations of an upcoming recession, while Amazon announced a corporate hiring freeze due to “unusual” economic conditions.

Lyft announced it would cut 13% of staff, nearly 700 jobs, according to the WSJ, while Stripe announced a 14% cut to just under 7,000 employees — implying a cut of at least 1,000 employees. Both companies cited recession fears and other macroeconomic challenges as motivators for their decisions, while Amazon senior vice president of people experience and technology Beth Galetti simply characterized current economic conditions as “uncertain and challenging” in a letter to Amazon staffers.

“We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives,” Lyft co-founders Logan Green and John Zimmer wrote to employees in their announcement. “Still, Lyft has to become leaner, which requires us to part with incredible team members.”

This messaging was shared by Stripe’s co-founders Patrick and John Collison, who stressed the need to embrace the reality of current conditions and prepare for “leaner times,” in an email to staff. The company was valued at $95 billion in its most recent round of funding, but has since cut its internal valuation by 28%, Reuters reported Thursday.

“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,” the Collisons wrote. “We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”

Despite the cuts, Lyft does not anticipate that it will miss its third quarter projections for revenue nor its 2024 financial targets, according to a filing with the SEC made by the company. The cuts are intended as a “proactive step” to ensure the company’s strong performance in the fourth quarter and beyond, Lyft claimed in the filing.

Lyft shares were down roughly 0.7% at time of writing, while Amazon shares were down roughly 2.8%, according to Google Finance.

Lyft and Amazon directed requests for comment by the Daily Caller News Foundation to their announcements. Stripe did not immediately respond to the DCNF’s request for comment.

Link to the original article on the Daily Caller website.