A growing number of tech companies are starting to put the brakes on hiring, but is now the time for them to be stepping back from investing in talent?

microsoft, oracle, google, facebook, apple, twitter, meta
Credit: Dreamstime

As the global economic downturn continues to deepen, many technology companies are reacting to fears of an incoming recession by putting the brakes on hiring.

While lowering payroll costs might seem like an easy way to reduce spending right now, the job landscape remains in a state of flux, with research showing that workers are just as pessimistic about the economic climate as their employers.

As a result, job seekers say they feel more urgency to find a job now, before market conditions change for the worse. This could leave companies that have decided to stop hiring with a talent drain they are unable to plug.

Where are the tech hiring freezes happening?

Google and Microsoft were among the first companies to announce a pause in hiring, quickly followed by Meta, Apple, and many more.

As reported by The Verge, Google sent out a memo to staff in July stating that the company would be “slowing down the pace of hiring for the rest of the year.” Just over a week later, The Information reported that Prabhakar Raghavan, Google’s senior vice president, sent out an email to inform workers that no new staff would be hired during the following two weeks.

The freeze reportedly won’t affect existing job offers, but no new offers will be extended to anyone with applications still pending.

Microsoft has also announced that it would be taking down all of its open job advertisements and implementing a hiring slowdown for the foreseeable future. The hiring slowdown will predominantly affect the company’s cloud and security units, according to a report from Bloomberg. The announcement comes two months after Microsoft said it planned to slow hiring in its Windows, Office, and Teams software groups.

Google and Microsoft are not the only tech companies that have started to take a more cautious approach to hiring. Earlier this year, Twitter initially issued a hiring freeze, then laid off 30 per cent of its talent acquisition team earlier this month.

At the end of June, Meta CEO Mark Zuckerberg was hostile on a call with employees, saying that “realistically, there are probably a bunch of people at the company who shouldn’t be here.” A month later, the company’s Q2 2022 financial results showed its first ever decline in revenue, with Zuckerberg telling investors that the economic climate looked even graver than it did the previous quarter.

Around the same time, Apple also announced that, while the company will continue to invest in product development, it will no longer increase headcount in some departments next year.

An uncertain hiring landscape

These moves come against backdrop of uncertainties in the geopolitical and economic landscape which has seen most organisations have to adjust their financial outlooks. A layoff aggregator from TrueUp estimates that since the start of 2022, 487 tech companies have announced layoffs, impacting 86,166 employees.

Jack Kelly, founder and CEO of The Compliance Search Group and Wecruiter.io, said that businesses are always going to take steps to mitigate poor economic conditions, with cutting costs within the workforce often an easy go-to option.

“The sad part is companies almost always immediately look to cut costs of the working people,” he said. 

“It’s never the CEO saying to the board of directors: ‘Hey, let’s all take a big cut.’ That should happen, but instead companies end up cutting salaries and benefits instead. I think we’re going to see the job market become very soft, making it difficult for a lot of people to find jobs.”

How might the workplace respond?

Kelly said companies are also likely to become more careful about how they hire and, where hiring freezes turn into layoffs, we could see a reversal in some of the flexible working practices that were borne out of the pandemic, as employees fear being labelled as “coasters” or “low performers”.

“I wouldn’t be surprised if a lot more people go back to the office because, honestly, I would,” Kelly said. 

“I’d be scared that if I’m at home and they decide to fire people, if they haven’t seen me or they don’t remember who I am, it’ll be easier to get rid of me then someone that’s in the office every day,” he added. This issue of proximity bias remains a cause for concern amongst organisations looking to successfully implement hybrid working models.

However, Sean Farrington, executive vice president at training software company Pluralsight, doesn’t believe that slamming the door on potential new recruits is necessarily the most sensible solution during tough times.

Although the economy in Europe isn’t any healthier, Farrington said the European companies with large technology teams that he’s spoken to are instead evaluating the talent they’ve already got and are looking for opportunities to up-skill and retrain existing employees.

Farringdon doesn’t see workforce cuts as the most sensible approach to cost savings. “Especially given the backdrop of an increasing skills gap in technically qualified individuals and the wider political dialogue around how we reinvent the economy for a digital world,” he said.

Research shows that employees want to be regularly offered training and the chance to develop new skills and are more likely to stay at a company if given those opportunities. The Great Resignation was a major topic of conversation in the first half of this year and, for companies that are no longer hiring, losing more employees is not an option.

“If a person leaves your organisation, you’ve got a gap, and therefore you can’t be as efficient and productive as you were,” Farringdon said.  “The first thing you should do is be careful with your human capital and make sure that you don’t unintentionally lose people by not showing a commitment to your employees, or failing to show that you value them in some way.”

Although the job market has largely bounced back after the pandemic, the looming recession is likely to bring with it a whole new set of challenges for job seekers.

While the hiring freezes at tech companies have yet to turn into mass layoffs, those currently employed will still find themselves battling stagnant salaries, below inflation pay rises, and increased commuting costs linked to spiralling gas prices, as the boom times look to be coming to an end.

TECH NEWS RELATED

Nord Stream leaked less methane than feared: atmospheric monitor

While the pipelines are not currently in operation, they both still contained natural gas, which is largely made up of methane. Leaks from the Nord Stream gas pipelines released some 70,000 metric tons of the powerful greenhouse gas methane, researchers said Wednesday, less than previously thought. The Nord Stream ...

View more: Nord Stream leaked less methane than feared: atmospheric monitor

Juno gets highest-resolution close-up of Jupiter's moon Europa

Surface features of Jupiter’s icy moon Europa are revealed in an image obtained by Juno’s Stellar Reference Unit (SRU) during the spacecraft’s Sept. 29, 2022, flyby. Credit: NASA/JPL-Caltech/SwRI Observations from the spacecraft’s pass of the moon provided the first close-up in over two decades of this ocean world, resulting ...

View more: Juno gets highest-resolution close-up of Jupiter's moon Europa

Intel’s Arc Of Success Takes A Back Seat To The Driver

Intel’s Arc A750 And Arc A770 Prefer Higher Resolutions The results are in and Intel’s new Arc A750 is a moderately priced 1440p card, and the Arc 770 is a not quite value 1440p card.  The testing shows that over the course of two dozen games that while the ...

View more: Intel’s Arc Of Success Takes A Back Seat To The Driver

Spotify Acquires Kinzen to Combat Hate Speech and Misinformation

Spotify, an audio streaming provider, has announced its acquisition of Ireland-based tech company Kinzen to assist in identifying and addressing harmful content on the platform. Partners Since 2020 The two firms have been collaborating since 2020. The initial goal was to eliminate the spread of disinformation in relation to ...

View more: Spotify Acquires Kinzen to Combat Hate Speech and Misinformation

China's Tech Industry and Education Is Far Behind, Says Education Agency Exec; Now It Affects the Future of Local Semiconductor Field

As the United States policy limits China’s access to advanced chip technology, the Chinese government has expressed an interest in developing the country’s capacity for self-sufficient chip manufacturing. However, the country lacks qualified workers as education is outdated. Moreover, South China Morning Post reported that students are not interested in the ...

View more: China's Tech Industry and Education Is Far Behind, Says Education Agency Exec; Now It Affects the Future of Local Semiconductor Field

Apple Releases Safari Technology Preview 155 With Bug Fixes and Performance Improvements

Apple today released a new update for Safari Technology Preview, the experimental browser Apple first introduced in March 2016. Apple designed the ‌Safari Technology Preview‌ to test features that may be introduced into future release versions of Safari. ‌Safari Technology Preview‌ release 155 includes bug fixes and performance improvements for ...

View more: Apple Releases Safari Technology Preview 155 With Bug Fixes and Performance Improvements

Five Apple Products You Should Avoid Buying Right Now

Rumors suggest that Apple still has several new devices that are coming before the end of the year, including a range of Macs and iPads. It’s not looking like we’re going to get an October event in 2022, but refreshes are coming soon, probably via press release. If you’re planning ...

View more: Five Apple Products You Should Avoid Buying Right Now

New cleaning technique boosts electronic and photonic prospects of aluminum nitride

Cross-sectional microscopy images of molecular beam epitaxy-grown aluminum nitride on aluminum nitride templates. The black squares in (A) and (E) mark the regions where the corresponding magnified images (B to D and F to H) are taken. The white notches in (A) and (E) indicate the growth interfaces. The ...

View more: New cleaning technique boosts electronic and photonic prospects of aluminum nitride

Utilizing chemo-mechanical oscillations to mimic protocell behavior in manufactured microcapsules

Research team develops a cleaner, more cost-effective way to make useful industrial chemicals

3M hopes its new powder can help unlock green hydrogen production

Europe can rapidly eliminate imports of Russian natural gas, say researchers

Judge says Twitter-Musk trial still on track

Climate change made summer drought 20 times more likely

Study: Removing GRE requirement does not undermine student success

Earth System Grid Federation launches effort to upgrade climate projection data system

Some everyday materials have memories, and now they can be erased

How to recover permanently deleted files on Windows quickly

Logging down the value chain raises future forest sustainability concerns

Researchers develop new tool for targeted cell control

OTHER TECH NEWS

Top Car News Car News