Illustration: Aïda Amer/Axios
Layoff and hiring freezes are cascading across America, after a record boom lulled many employers and employees into a false sense of security.
Why it matters: In statement after statement, companies warn they’re preparing for dire times.
Twitter today is taking the extreme step of locking its offices and suspending employees’ badge access, as new CEO Elon Musk begins mass layoffs expected to cut deep into the platform’s 7,500 employees.
- In an ominous email to staff, Twitter said cuts will begin at noon ET: “In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday.”
Internal plans earlier this week had Musk looking to cut 3,700 Twitter staff, or about half the workforce, Reuters reports.
- The email said employees not laid off will find out via their work email. Staff who are losing their jobs will be notified with next steps to personal email addresses.
What’s happening: During the past decade, tech workers got used to high salaries, plush benefits and tons of opportunity. Workers in other industries were paying a heavy price for the pandemic. But tech continued to prosper.
- So it’s still a little hard for most people in Silicon Valley, and the wider tech industry, to get their heads around just how tough times could be getting for them.
Tons of layoffs and freezes are being announced or leaked as companies race to prepare for bleak months ahead:
- Amazon announced a “pause on new incremental hires in our corporate workforce,” citing the “unusual macro-economic environment.”
- Lyft said it will lay off about 680 employees, or 13% of staff, and blamed inflation and the slowing economy. Co-founders Logan Green and John Zimmer told staff of “the tough reality.”
- Stripe CEO Patrick Collison said the payments company will lay off 14% of its workforce, returning to February’s headcount of 7,000: “We were much too optimistic about the internet economy’s near-term growth … and underestimated … a broader slowdown.”
- Apple has paused hiring for many jobs outside R&D, Bloomberg reports.
- CNN Worldwide employees are expecting layoffs after chairman and CEO Chris Licht warned in a memo last week of “unsettling” changes in light of “widespread concern over the global economic outlook.”
The bottom line: Tech is the most forward-looking of all industries, Axios’ Felix Salmon notes. You don’t hire for where you’re at today — you hire for where you aspire to be tomorrow.
- When tomorrow doesn’t come, that means layoffs.
