Even Amazon — America's second largest employer — isn't immune to changing economic conditions.
Amazon is instituting a hiring freeze among corporate positions in its retail division, even as the holidays approach. The news comes as the company cut 100,000 jobs over the last quarter, which ended in June.
"Amazon continues to have a significant number of open roles available across the company,"  said Brad Glasser, an Amazon spokesperson. "We have many different businesses at various stages of evolution, and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures."
It's not just Amazon rethinking its workforce. Meta recently shut down an office in New York and could lose as much as 15 percent of its staff in the upcoming weeks, according to a report from Insider. Alphabet CEO Sundar Pichai recently said he hopes to make his company 20 percent more efficient, which likely will include reducing the number of employees. Other companies like Snap, Coinbase, and Peloton have also curtailed headcount.
An aerial view shows a newly unveiled logo for "Meta", the new name for Facebook's parent company, in front of Facebook headquarters in Menlo Park on October 28, 2021. (Photo by NOAH BERGER / AFP) (Photo by NOAH BERGER/AFP via Getty Images)
A PWC study in August revealed 52 percent will enact a hiring freeze over the next six months to a year, while half of companies are slated to cut their employee numbers. More than four out of 10 said they will rescind job offers. About 42,000 tech workers have been laid off as of September, per Crunchbase News.
"When you find yourself thinking about an uncertain year, you tend to slow hiring and be more thoughtful about hiring rather than resorting to a layoff," said Allison Rutledge-Parisi, senior VP of people at payroll and HR technology firm Justworks. "If you're fortunate as an organization to slow down hiring, that's a better position."

Hiring Freezes as Winter Nears

Many of these larger companies facing layoffs now simply had bloated headcounts due to necessity during the pandemic. Companies like Amazon, which saw its retail business boom as people ordered more products from home, no longer need the staff to power all those orders. And as brands curtail ad budgets due to inflation and online privacy initiatives make ad targeting more difficult, companies that are digital advertising reliant are also gearing up for a downturn in revenue.
"Meta and Alphabet have spent the last few years preparing for and reacting to the deprecation of third-party identifiers across the digital advertising ecosystem," said Evelyn Mitchell, Insider analyst. "Their strategies included making bets on future tech trends and building out teams to make progress on longer-term initiatives, like the metaverse, in Meta's case. These hiring decisions were made in very different economic conditions. With inflation, a potential recession, unreliability of ad revenues, and tough annual earnings comparisons entering the picture, Meta and Google are having to course correct to preserve bottom lines in the short-term."
In addition, the rise of tech's hybrid workforce has made the need for large amounts of office space obsolete. Although many companies are still expanding their footprint, others see opportunities for cost-cutting measures without having to reduce the number of employees.

The Benefits of Staying Small

It isn't all bad news for the entire tech industry. The U.S. overall added 208,000 jobs in September, according to ADP, ahead of projections. While the JOLTs report revealed job openings declined 10 percent from July to August, there are still more than 10 million openings.
Part of this trend could be that smaller, private tech companies aren't facing as many layoffs or headcount restrictions as their larger public counterparts, which have investors to answer to.
"Public companies are facing pressure from investors to keep profits up," Mitchell said. "When revenue is down or uncertain, lowering overhead costs by reducing staff is one way to achieve that goal. Private companies are under less scrutiny and are able to stay the course on long-term investments in their workforce through economic hardship, if they choose to do so."
Justworks isn't seeing many layoffs among its tech clients, many of which still have job openings. These positions tend to be integral to these companies, meaning people shouldn't fear they'll go away in a few months.
"The tech sector is managing or hiring with more thoughtfulness than they were doing 12 months ago," said Rutledge-Parisi of Justworks.
And, Insider's Mitchell is confident the entire industry will bounce back with more opportunities.

"I wouldn't be surprised, though, if, once we're out of the macroeconomic woods, the companies breathe new life into long-term initiatives," she said.