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US tech layoffs increase as the world faces a severe recession

US TECH LAYOFFS
US tech Layoffs: The US tech sector witnesses the highest job cuts since 2020

Synopsis: US tech Layoffs- The global recession, followed by rising inflation, has resulted in layoffs at several notable technology firms around the world.

US tech layoffs increase as the world faces a severe recession

US tech layoffs: The global recession, followed by rising inflation, has resulted in layoffs at several notable technology firms around the world.

US tech layoffs have increased considerably in recent days at prominent startups such as Stripe, Lyft, and Opendoor, with staff receiving pink slips.

On the other side, several large corporations, like Amazon, have halted employment.

Many IT companies, including Apple, Microsoft, and Uber, have ceased hiring or handed in resignation letters to employees in order to decrease costs and maintain positive operating margins in recent months.

Low earning revenues, dropping advertising revenues, and tapering guidance figures have increased the burden, causing companies’ stock prices to fall.

The following tech companies have announced layoffs in the last few days-US tech layoffs

1. Lyft

Lyft Inc announced on Thursday that it would lay off 13% of its workforce, or approximately 683 individuals, in an effort to cut expenses in response to the failing economy.

The company’s most recent decision is expected to result in a charge of between 27 million USD and 32 million USD in the fourth quarter.

US tech layoffs: Lyft Inc announced on Thursday that it would lay off 13% of its workforce

Previously, the corporation had halted the hiring process and announced 60 job layoffs this year.

Furthermore, the company has guaranteed that the layoffs would not affect the previously published revenue forecast for the period.

It anticipates revenue of 1.04 billion to 1.06 billion USD and adjusted core profit of 55 million to 65 million USD.

Lyft stated in a statement that the announced workforce decrease is an active step as part of the company’s annual planning.

The layoffs can be ascribed to a Labor Department proposal to limit the use of independent contractors, which might increase prices.

2. Stripe

Stripe, a Silicon Valley payment behemoth, has laid off 14% of its overall workforce. Stripe’s CEO stated that inflation, particularly rising interest rates and limited startup capital, has forced the company to slash prices.

US tech Layoffs: Stripe has laid off 14% of its overall workforce

Collison has even claimed that the business’s management issues were caused because the company ‘overhired’ personnel during the pandemic and was ‘overconfident’ about the e-commerce platform’s near-term development.

Stripe had more than 8000 people last month, and subsequent layoffs have reduced the headcount to less than 7000, the same staff size projected for February 2022.

Some departments in the corporation have been sacked in greater numbers than others, including the Recruitment department.

Stripe is paying fourteen weeks of severance compensation and one full-year bonus, as well as cash equivalent to six months of existing health premiums, to compensate for the layoffs.

Former employees claim Stripe planned layoffs from the start and originally targeted low-performing employees. However, the economy has deteriorated, and layoffs would be directed at employee performance as well as job functions and enterprises.

3. Opendoor:

Opendoor is a property-selling platform that is currently laying off about 550 employees. It is one of the most challenging real estate markets in forty years and the company has to manage its businesses.

Opendoor has already decreased the strength of its workforce by more than 830 employees.

US tech Layoffs: Opendoor is currently laying off about 550 employees

Opendoor is a real estate portal that is now laying off around 550 staff. It is one of the most difficult real estate markets in forty years, and the corporation must manage its operations.

Opendoor has already reduced its employment by more than 830 individuals.

The company was backed by the Softbank Group, which went public in 2020 through a reverse merger with SPAC.

This year, the company’s stock has dropped by more than 80%.

4. Chime:

It is one of the top fintech organisations and recently announced the layoff of approximately 12 percent of its workforce, totaling 1300 individuals. As of now, the corporation has laid off 630 people. They are, however, still hiring for specific positions.

US tech Layoffs: Chime recently announced the layoff of approximately 12 percent of its workforce

During the pandemic, the company witnessed fast development, reaching millions of subscribers and reaching a valuation of $25 billion USD a year ago.

The firm focuses on millennials who earn between $35,000 and $75,000 each year. These folks, however, are likely to be frustrated by rising costs and will be unable to keep bigger amounts.

According to Forbes, Chime has stalled its entry into the public market due to inflation and rising interest rates, which are raising concerns about a global recession.

5. Amazon:

Amazon has previously stated that it will slow down its hiring process as it struggles with the severe financial situation.

US tech Layoffs: Amazon has previously stated that it will slow down its hiring process

The firm has already begun limiting hiring in some of its companies in recent weeks, but aims to continue employing in the coming year.

It has not yet chosen to decrease its workforce.

The human resources official stated that the company expected to keep the hiring process under control for months while watching the economy to adapt decisions.

Read Also:

IMF projection: Global growth at mere 2.7 per cent in 2023, India’s at 6.1 per cent

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