The job market in the technology industry has started to show some cracks.
On Tuesday, streaming giant Netflix (NFLX) confirmed that it was cutting 150 employees amid slower demand. On the same day, e-commerce giant Wayfair (W) announced a 90-day recruitment freeze, citing ‘macro uncertainty’.
The cost-cutting measures coincide with the recent stock market crash and the beginning of a tight monetary policy cycle.
Miller Tabak’s Matt Malley told Yahoo Finance that “a decade of free money is running out for companies”. In the wake of the recent stock market turmoil, companies “will not be able to go to the market to raise money. If they want to take corporate loans, they will have to spend more money.”
Malley added that “the amount of cheap money out there is going to shrink.”
Talent fight for technology ‘never goes away’
Many companies have announced cuts or hiring fridges, seeing their highest valuations during the epidemic when interest rates were close to zero and the stock market was at an all-time high.
And as the epidemic subsides, fast-growing startups are now looking to change consumer habits to meet growing demand.
Popular investor app Robinhood (Hood), connected fitness maker Peloton (PTON), and used car platform Carvana (CVNA) have announced layoffs in recent months. Even well-established technology giants like Meta (FB) and Twitter (TWTR) are taking a break from hiring.
Some cuts should come as no surprise, as the slower growth was clearly telegraphed at the time of the recent earnings release. The same thing happened with Netflix.
A spokesman for Netflix said in a statement: “As far as our revenue is concerned, our slower revenue growth means we have to slow down our spending growth as a company.”
Despite the increase in technology cuts, there are now more job opportunities in the industry than last year. According to Mali, companies will try to protect their core employees at any cost.
“The battle for talent, it never goes away in terms of technology,” Malley said. “They’re going to say, ‘We want to make sure we have enough money to keep our best people.'”
A market reporter covering Ines Equity. Follow her on Twitter @ines_ferre
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