(JustPatriots.com)- Yet another major tech company has announced that they would stop hiring employees at a fast rate for the rest of the year.
This time, it’s Google that made the announcement, saying they needed to take a fresh look at their staffing as the downturn in the market — fueled in large part by out-of-control inflation — has crushed many tech firms.
On Tuesday, the CEO of Google’s parent company Alphabet, Sundar Pichai, made the announcement through a memo to employees, saying that the reason for doing so was “the uncertain global economic outlook.”
While Google confirmed that the memo was indeed sent, they wouldn’t comment any further on it. The Wall Street Journal, though, published additional sections of the memo. In it, Pichai wrote:
“Moving forward, we need to be more entrepreneurial, working with greater urgency, sharper focus and more hunger than we’ve shown on sunnier days. In some cases, that means consolidating where investments overlap and streamlining processes.”
According to mandatory regulatory filings, Alphabet employed almost 164,000 people as of the end of the first quarter of this year. That was an increase of more than 20,000 employees from the same time in 2021.
While many high-tech companies experienced a huge surge in revenue and profits during the early days of the pandemic — which forced people inside — those days are starting to dissipate. While consumer behavior has changed in many ways for good, there are a number of factors that have tech companies worried.
Some of these concerns are interest rates that are rising, fears of a global recession on the horizon, and inflation that continues to spike. As a result, Google and some of its main competitors have announced that they would either cut staff or at least slow the pace of hiring for the remainder of 2022.
Coinbase and Netflix have already announced plans to lay off workers. Delivery startup GoPuff also let their investors know recently that they would be cutting 10% of its workforce across the globe, while also closing many of its warehouses located in the United States.
Earlier in the week, Microsoft also confirmed that it would be cutting some jobs, though it wouldn’t be that many. The company did say that it has plans to keep on hiring in certain departments.
Other major tech companies that have signaled they plan to cut back on costs in the near future include Apple, Twitter, Snap, Lyft and Uber.
Rising inflation is causing massive headaches to people and companies all over the country. As prices have risen, the costs to companies have, too. They then have one choice — pass those costs onto consumers or absorb them and be less profitable.
It’s obviously not an easy choice for businesses to make. They must weigh what will happen if they take either approach to rising costs.
Soaring interest rates are also historically a big problem for high-tech companies, who often rely on outside capital to fuel new projects and initiatives.