The succession of crises and difficult economic conditions do not commit American IT companies to recruit. Several articles show that hiring freezes and layoffs are on the rise in the IT sector. After Twitter, Meta and Uber, which have all slowed down their recruitments in recent weeks for various reasons, it’s Salesforce’s turn to ease off on hiring.

“Since the onset of the pandemic, companies have accelerated their digital transformations to support hybrid working and meet customer demand,” said Jamie Kohn, research director for HR at Gartner. “At the forefront of supporting this transformation, IT companies are now taking a step back to reassess their needs for future growth. Therefore, it is likely that the freeze on these hirings will not last,” he added.

Salesforce and Meta are suspending some recruiting

This pause in recruitment in the IT sector contrasts with a general environment marked by a shortage of talent. “Aside from the IT industry, the demand for technology skills is quite strong,” Kohn said. “Many companies are still struggling to recruit the skills they lack to meet their incessant IT needs. Talent in this field will still find plenty of opportunities in the job market, even if they no longer come from large IT companies.” According to an internal memo seen by Business Insider, Salesforce will suspend some hiring to control spending. Some company business trips and ancillary facilities will also be canceled, according to a report published last week. Note that in a statement, Salesforce said it still expects to hire 4,000 people this quarter.

Meta, owner of Facebook, also plans to pause future engineering hiring, according to The Verge, which had access to the contents of an internal meeting of company staff. The hiring freeze follows a decision made at the start of the Covid-19 pandemic to cut spending in certain areas, including the development of video and audio calling features to rival Zoom and shopping features. According to a company memo seen by Business Insider earlier this month, Meta had already told staff it intended to suspend hiring in its engineering division for the remainder of 2022. Meta’s chief financial officer, David Wehner, justified this decision by the observed “industry-wide” slowdown, but also by the invasion of Ukraine and the changes relating to data protection.

Twitter, Coinbase and Uber between hiring cuts and freezes

Twitter last week also hinted at a hiring freeze as the social network prepares to be bought out by Elon Musk for $44 billion, but no layoffs are on the cards just yet, according to a internal email to which The Verge allegedly had access. Twitter similarly laid off senior executives, including Kayvon Beykpour, formerly head of consumer products, and Bruce Falck, chief revenue officer. Elon Musk is said to have proposed job cuts prior to the takeover, in the speech he gave to raise funds to acquire the company, before increasing the workforce in the following years. And last Tuesday, the cryptocurrency exchange Coinbase announced that it was scaling back its aggressive hiring policy envisaged at the start of the year due to the recent market downturn. “We had planned to triple the size of the business, but given the current market conditions, we believe it is prudent to slow down hiring and reassess our staffing needs against our highest priority business goals. said Emilie Choi, President and COO of Coinbase, in a blog post.

Uber CEO Dara Khosrowshahi also briefed staff on plans to cut spending. He also said recruiting should be considered a “privilege and the decision to bolster staff would be subject to deliberation,” according to an email seen by CNBC last week. Mr. Khosrowshahi referred to a “sharp change” in market conditions. “While the rationale for cutting hiring varies from company to company, many are cautious about macroeconomic conditions and recession predictions later in the year,” said Jack Gold. , Founder and Principal Analyst at J. Gold Associates, LLC. “As public companies, they must report quarterly to their shareholders, who scrutinize expenses very closely when sales are not progressing. This factor plays an important role in the decision to pause or reduce hiring,” he added.

Expected layoffs

At the same time, many large IT companies have been hiring heavily in the last year or two of the pandemic because “sales were up and the market was very active,” Gold said. “This slowdown in hiring, the time to fully absorb new employees into the company, is therefore not surprising, since it takes on average around six to twelve months for the latest recruits to be fully operational in their position. “, he added.

Other companies in the IT sector have gone further by deciding to cut jobs. According to Variety, at Netflix, the drop in subscriber numbers resulted in the layoff of 150 people, or 2% of its US workforce, and 70 part-time positions. Online trading platform Robinhood also laid off 10% of its workforce in April. Finally, collaboration software publisher Mural and online car dealership Carvana have also reduced their workforces. According to layoff tracking site Layoffs.fyi, since the start of the year, more than 80 IT companies have taken layoff action.