Economic Downturn: Amazon, Lyft, and Others Will Cut Down their Labor Force

As a result of the economic downturn, many companies, especially tech companies, are downsizing. 

Within the week, some big tech companies announced they would be cutting down their labor force. Popular among them are Amazon and Lyft. Inc. Amazon (AMZN) announced a -3.06 percent decrease, and Lyft (LYFT) announced a 2.00% decrease, both announcing major layoffs.

The Federal Reserve again raised interest rates to battle inflation, signifying a larger possibility that the U.S. economy is entering a recession as a result of the flood of bad news for the sector.

Executives from tech companies are predicting harder times in the future in light of that prospect.

According to Beth Galetti, senior vice president of people experience and technology at Amazon, “We’re facing an unusual macroeconomic environment and want to balance our hiring and investments with being thoughtful about this economy.”

The message informed them of Amazon’s intention to halt hiring across its corporate workforce, including personnel from well-known departments like Prime Video and groceries.

Many of the world’s greatest technology companies are cutting back after years of unheard-of expansion and record earnings because of the pandemic’s altered consumer behavior and the need for them to scrutinize expenditures on everything from investments to advertising.

Payroll adjustments have occasionally been made at businesses that have made cuts.

According to an earlier Thursday story by The Wall Street Journal, Lyft co-founders John Zimmer and Logan Green announced Thursday that the firm would eliminate 13% of its workforce or approximately 700 positions.

The founders mentioned the probable recession in a document, and they predicted that the cost of ride-sharing insurance would rise. Without counting the drivers, Lyft employs more than 5,000 people. The corporation announced its intention to limit hiring and slash spending in some departments before laying off approximately 60 workers in July.

As its sales have declined and executives have battled to reposition the social media firm with its new focus on the metaverse and virtual reality, Facebook parent company Meta Platforms Inc. has expected to reduce expenses by at least 10%, including through personnel cutbacks.

Furthermore, 14% of Stripe’s workers will be laid off, the company announced on Thursday. 

In a memo to staff, Chief Executive Patrick Collison spoke of “stubborn inflation, energy shocks, increased interest rates, smaller investment budgets, and scarcer startup finance.”

Dapper Labs, which produces nonfungible tokens from content in the National Basketball Association and National Football League, also announced to cut off 22% of its personnel.

This summer, trading company Robinhood Markets Inc. eliminated 9% of its workforce, and cryptocurrency exchange operator Coinbase Global Inc. laid off 18% of its employees.

Even though prominent corporations tried earlier cost-cutting strategies this year, the declining trends continued.

In the instance of Amazon, the business cut back on plans for warehouse expansions this year and stopped hiring in its primary retail operation last month. 

Following past changes, Lyft is currently cutting back on its employees once more.

Meanwhile, executives from Apple Inc. have stated that they are hiring “deliberately,” while Google, a subsidiary of Alphabet Inc., has made it a requirement for some employees to apply for new positions in order to stay at the firm.

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