Why are tech companies putting a hold on their hiring process and laying off their employees? How have employees been fired because of Apple’s new app tracking feature?
the story So Far: A week after Elon Musk took over the reins of the micro-blogging platform, reports of Twitter cutting half of its workforce globally and almost across India may have overshadowed a very dismal tech talent landscape. Many large technology firms have already halted hiring and, in some cases, are laying off employees because macroeconomic headwinds and tight business budgets are making them restructure their business processes and talent needs. Earlier this month, Amazon said it was stopping hiring at its corporate event.
Why are companies laying off employees?
Apple CEO Tim Cook recently told investors that the company will “continue to hire people and invest in areas, but we are more intentional in doing so.” a new report by business Insider Said that the iPhone maker is putting a hold on hiring for the next two quarters.
Despite the US government’s support to the semiconductor industry through the Chips Act, Intel has decided to lay off employees at some divisions. The chip maker announced plans to cut costs by about $3 billion over the course of the next year, as part of its third-quarter earnings release.
Social AR firm Snap Inc. is planning to cut a fifth of the workforce. In August, CEO Evan Spiegel told employees in a memo that the company would cut its workforce by more than 1,000 employees. He cited bleak revenue projections and said a restructuring was needed for long-term success in a tight environment.
On Wednesday, Facebook’s parent company said it was laying off 11,000 employees. Just a year ago, after CEO Mark Zuckerberg changed the company’s name to Meta Platforms and plunged into the amorphous metaverse, the company detailed plans to hire 10,000 employees over five years in the European Union (EU) region. The plan seems to have now been put on hold as it prepares to cut discretionary spending and extend the hiring freeze for the next several months.
Is Apple behind the decision to lay off employees of tech companies?
Social media platforms like Meta and Snap have been affected by an update from Apple. The iPhone maker has introduced an app tracking feature that lets users opt out of apps that track them.
Facebook and Snap get a large portion of their revenue from selling space for ads. And for their platform to be effective in placing relevant ads, they must collect and analyze user data. But Apple’s new feature has made it difficult for these firms to push targeted ads. By some estimates, Facebook lost around $12 billion as a result of Apple’s app tracking feature.
What are the primary reasons?
In the case of chip makers such as Intel and Qualcomm, the challenge comes from declining sales of laptops and mobile devices. In its earnings call last week, Qualcomm cited a “sharp decline in demand and easing supply constraints in the semiconductor industry, resulting in enhanced channel inventories.”
For smartphone companies that usually end the year on a high note, the chip firm’s gloomy outlook is cause for concern as Qualcomm doesn’t expect the market to recover anytime soon.
High inventory for chip makers, low demand from handset makers, dwindling revenue from selling ad space for social platforms, and uncertain long-term bets like the Metaverse have all played a key role in causing large tech firms to restructure their business practices. This has put them on hold from hiring in some cases, and axed talent in others.
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Many large technology firms have already stopped hiring and in some cases are laying off employees.
Social media platforms like Meta and Snap have been affected by an update from Apple. The iPhone maker has introduced an app tracking feature that lets users opt out of apps that track them.
High inventory for chip makers, low demand from handset makers, dwindling revenue from selling ad space for social platforms, and uncertain long-term bets like the Metaverse have all played a key role in causing large tech firms to restructure their business practices.