As a result of increasing interest rates, slower consumer spending in the United States, and a strong dollar abroad, tech businesses are cutting workforce and slowing hiring. According to Challenger, Gray & Christmas Inc., a consulting firm that tallies job cutbacks declared or verified by companies in telecom, electronics, hardware manufacturing, and software development, the tech industry shed 9,587 employees in October, the biggest monthly total since November 2020.
Recent earnings announcements from Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., Microsoft Corp., and others fell short of predictions, sending shares tumbling and slashing market valuations by hundreds of billions of dollars. For example, Meta has lost over 67% of its value this year.
Chime Financial Inc., a digital-banking firm, is laying off 12% of its workforce, or 160 workforce. According to a spokeswoman, the company has enough capital and the move would position it for “long-term success.”
DoorDash Inc. is laying off approximately 1,250 workforce, admitting that its quick growth during the epidemic has resulted in growing losses. According to Bloomberg, the layoffs will affect around 6% of the company’s personnel, which will be a mix of US and non-US workforce.
Galaxy Digital Holdings Ltd., a crypto financial services corporation established by billionaire Michael Novogratz, is considering laying off up to 20% of its workforce. According to those acquainted with the situation, the plan could yet be revised, and the ultimate percentage could be in the 15% to 20% area. Galaxy’s stock has dropped more than 80% this year as part of a cryptocurrency crash.
HP Inc. will lay off up to 6,000 workforce over the next three years as demand for personal computers falls. The corporation will cut its real estate footprint in addition to lowering its workforce by 10%.
Intel Corp. said it is reducing workforce and deferring spending on new plants to save $3 billion next year. The goal is to save up to $10 billion by 2025, which has piqued the interest of investors, who propelled the stock up more than 10% on Oct. 28. According to Bloomberg News, the job cuts could amount in the thousands.
Lyft Inc. is cutting costs by selling its vehicle service division. It will lay off 13% of its workforce, or approximately 683 workforce. The corporation has previously stated that it would not be employed in the United States until at least next year. It is now contending with much stronger headwinds.
Opendoor Technologies Inc. announced the layoff of around 550 individuals or approximately 18% of its workforce. The company, which uses a data-driven approach to home flipping known as iBuying, is dealing with a sluggish housing market due to increase borrowing rates.
In October, Peloton Interactive Inc. lay off 500 people worldwide or around 12% of its staff. This was the company’s fourth layoff this year. Peloton claims that this decision, together with other cost-cutting measures, will help the company reach the break-even point on cash flow by the end of fiscal 2023.
Seagate Technology Holdings Plc, the world’s largest manufacturer of computer hard drives, has announced the elimination of around 3,000 positions. The downturn in hardware purchasing has struck computer suppliers hard, notably Seagate and Intel. Further, customers have a lot of spare inventory, which is harming orders and weighing on Seagate’s financial performance, according to CEO Dave Mosley. Cuts were therefore necessary. We have responded quickly and decisively to present market conditions in order to improve long-term profitability, he said.
Discovery-owned by Warner Bros. According to a CNN reporter’s tweet, CNN’s senior executive, Chris Licht, warned his staff in an all-staff email on Wednesday that layoffs are starting. According to the tweet, Licht stated that CNN would tell a small number of people, primarily paid donors, today and impacted workforce tomorrow.
H-1B Visa Holders
For the past two months, mass layoffs have dominated headlines in the technology sector. On the one hand, it reflects broader cost-cutting measures implemented by major technology firms in the United States. The recent drop in their profitability is evidenced by the fact that the tech-heavy Nasdaq index has dropped nearly 30% this year, following a two-year bull run.
Most of those laid off workforce in the U.S. are H-1B visa holders, which might generate a serious catastrophe. These visas grant non-immigrant status while allowing holders to work in the United States. Many Indians working in the United States, especially in the technology sector, are H-1B visa holders.
Companies, in their quest to reduce costs, do not always consider the humanitarian implications of firing workforce. Many H-1B visa holders who have been laid off will now be forced to leave the United States. With the holiday season approaching, H-1B visa holders who have recently been laid off are running from pillar to post. They are looking for options that will allow them to remain in the United States. Further, to understand their options, they must first understand the precarity that comes with the H-1B visa.
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