Amazon pauses hiring, joins other tech cos in 'hiring freeze'

E-commerce major Amazon is reportedly freezing hiring of new corporate positions across the company amid worsening economic conditions. 

"We're facing an unusual macroeconomic environment, and want to balance our hiring and investments with being thoughtful about this economy," Beth Galetti, Amazon's SVP of people and technology, wrote in a blog post announcing the freeze. 

“We had already done so in a few of our businesses in recent weeks and have added our other businesses to this approach. We anticipate keeping this pause in place for the next few months, and will continue to monitor what we’re seeing in the economy and the business to adjust as we think makes sense,” she said. 

Hiring freezes had reportedly hit several Amazon divisions, including the company's advertising business, over the past week, and as per a Bloomberg report, the company said, it has “expanded those measures to include the entire corporate workforce”. 

Last week, Amazon released dismal third-quarter earnings showing revenue growth of 15%—down from 37% growth a year ago—that fell well below analysts’ expectations. Its stock plummeted 20% overnight, ultimately sending the company’s market value below $1 trillion for the first time since 2020. 

Soon after, the company laid off around 150 people from its live radio division, and on Thursday shared with employees that it was implementing a hiring freeze for corporate retail jobs. 

It is not only Amazon that has announced a hiring freeze, on Thursday, Apple said it would stop hiring in most departments. The company has paused hiring for many jobs outside of research and development, an escalation of an existing plan to reduce budgets heading into next year, according to people with knowledge of the matter. 

Strong economic headwinds, a poor quarterly performance and recession fears have prompted many Silicon Valley tech companies to make some tough staffing decisions. While bigtech companies including Facebook parent Meta and Google parent Alphabet said that have frozen hiring over the past few months, some of the other US tech companies including payments provider Stripe and ride-hailing business Lyft resorted to layoffs citing the economic headwinds and increasingly unfavourable impact on tech hiring.  

In an email to employees announcing the layoffs of 1000 workers, Stripe CEO Patrick Collison wrote that 2022 represented “the beginning of a different economic climate,” and “to adapt ourselves appropriately for the world we’re headed into, we need to reduce our costs,”  referring to energy shocks, higher interest rates, inflation, declining investments, and global recession. 

Lyft said on Thursday that it would lay off 13% of its workforce, or nearly 700 employees, the Wall Street Journal reported. The company had already laid off around 60 workers in July in an effort to cut costs and consolidate its operations. The company cited reasons such as higher insurance costs and inflation as well as rising uncertainty over future economic conditions for its freeze. 

More tech layoffs may be coming soon with new Twitter owner Elon Musk expected to cut nearly 50% of the social media company’s workforce by 3,700 jobs by Friday. Sources have reported throughout the week since his takeover, senior managers had been ordered to draw up lists of people to be fired. Bloomberg reported that employees are expected to be notified on Friday on whether they are laid off. Twitter too missed analysts’ earnings expectations during the second quarter, with managers blaming the poor performance on advertising revenues. 

According to a survey of 400 US CEOs by consulting firm KPMG, published in October 2022, over 90% of CEOs in US tech companies believe a recession is on the way, and over half said they’re planning pre-emptive layoffs within the next six months. Analysts also warn that Silicon Valley’s major layoffs could be warning sign for the larger economy.