Tech companies are slowing hiring or announcing layoffs. Is this the start of a cooler job market?

The tech industry’s hiring boom appears to be slowing.

The sector has proven to be impressively resilient during the pandemic, with better growth and results than most other sectors. But that appears to be changing.

Uber CEO Dara Khosrowshahi told employees over the weekend that the company would start treating hiring as a “privilege.” Other companies, including Facebook’s parent company Meta, have also slowed hiring. Netflix and Robinhood have gone further as they begin laying off employees.

The volatile earnings of big tech companies have been hard on stock prices. The Nasdaq saw a 3.3% loss in morning trading as investors continued the exodus of technology stocks that began last month. The index is down 30% from December.

If tech companies are tightening their hiring belts, does that mean that job growth in America over the past few months has begun to falter?

The latest employment figures show that the labor market is still very strong.

The United States added 431,000 new jobs in April, according to the Labor Department’s latest employment report, defying early expectations that put new job numbers at 400,000.

But due to high inflation, the Federal Reserve gradually raised interest rates for several months, which increased borrowing costs. Many experts and analysts have warned of an impending recession. That could put an end to the so-called great resignation that saw Americans leave their jobs in huge numbers.

“This is the time to take advantage of a tighter labor market for workers because there is no guarantee that these conditions will continue,” Daniel Gao, chief economist at job site Glassdoor told CNBC last week.

Calm down the tech industry

Newer car-sharing giant Uber Technologies is among several tech companies that have announced more conservative and selective hiring practices going forward as the company’s business outlook changes.

Khosrowshahi said the hiring slowdown was in response to a “seismic shift” in the market. He did not rule out the possibility of layoffs, something that Uber has not abandoned in the past.

Uber is the latest tech giant to make the hiring process easier.

Meta, the parent company of Facebook, announced last week that it would halt or slow hiring for most middle and senior positions at the company. The announcement came as Meta reported lower-than-expected revenue in its quarterly earnings report released at the end of April, which also revealed an estimated $3 billion loss for the Reality Labs metaverse business.

Several tech companies had similarly disappointing returns in their first quarter reports, and some went so far as to announce significant layoffs.

On April 26, digital brokerage app Robinhood said it would cut 9% of its workforce, after increasing the company’s headcount from around 700 in 2019 to 3,800 at the end of 2021.

Streaming giant Netflix laid off dozens of employees from its brand-new editorial companion site Tudum at the end of April, just months after a hiring spree to build the site. The layoffs occurred shortly after the company’s shares began rising after announcing a loss of 200,000 subscribers in the last quarter.

The reality is catching up with technology

Most of the tech companies that have said they will slow hiring or begin laying off workers have one thing in common: They all noticed a massive shift in the market, with tech stocks plummeting in the early months of 2022 leading to cumulative losses of $17 billion. technology companies.

There are reasons why belt tension is particularly harmful to technology.

Technology companies have grown at a starting rate during the pandemic, with many people stuck at home, and demand for products like games, phones, cloud services, and digital subscriptions. As people begin to leave their homes more, these trends change.

But factors such as rising interest rates and recession fears can also apply to other industries. And in times of economic uncertainty, job hopping and high employee turnover may become things of the past.

A May report from the Peterson Institute for International Economics found that hourly wage increases for jobs this year have been much lower this year than they were in 2021, leading researchers to write that if this continues, it would suggest that labor markets may be in good case. Much cooler than previously estimated – reducing core pressure on inflation.”

The number of Americans willing to quit their jobs is already down from its height in the pandemic era. About 37 million people are expected to leave their jobs in 2022, according to a survey conducted by research firm Gartner in April, a sharp drop from the 47 million who did so last year.

It’s not clear if the changing hiring and retention practices of tech companies this year mean the broader job market is primed to cool things down. But the uncertain economic outlook and falling stocks suggest that the ongoing job changes and plentiful job opportunities available during the Great Resignation may be coming to an end.

This story originally appeared on Fortune.com

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