Amazon, Lyft, Stripe buckle down, warn on economy
Separate tech staffing announcements today sounded alarm bells for what has been, overall, a stubbornly healthy labor market.
Driving the News: Amazon announced a hiring freeze, while Lyft, Stripe and Chime all announced layoffs, citing concerns about the economy.
- Ride hailing company Lyft is laying off 13% of its staff.
- Co-Founders John Zimmer and Logan Green blamed inflation and a slowing economy in a staff memo, per Bloomberg.
Meanwhile, Stripe, the e-commerce payment processor, said Thursday it would lay off around 14% of its workforce.
- It said its management greatly overestimated the internet economy’s near-term growth, and underestimated the impact of a broader slowdown.
- "The world is now shifting again," CEO Patrick Collison wrote to employees. "We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding."
- And Chime, a fintech that relies heavily on spending by millennials, told CNBC that it planned to cut 12% of its 1,300-person workforce.
Separately, Amazon is extending a pause for new hires across its corporate workforce, telling employees that the economy is "in an uncertain place."
- "We’re facing an unusual macro-economic environment, and want to balance our hiring and investments with being thoughtful about this economy," Amazon HR chief Beth Galetti wrote in a memo, published by CNBC.
The intrigue: These announcements continue to stand in contrast to data that suggests the labor market remains strong, despite the Federal Reserve's aggressive tightening efforts.
- New figures showed few layoffs and abundant job openings as recently as September.
- While that data is backward-looking, even more up-to-date job market indicators — including low levels of people filing for unemployment — tell a similar story, Axios' Neil Irwin and Courtenay Brown wrote this week.