SAN FRANCISCO: Payments firm Stripe and rideshare company Lyft, two darlings of Silicon Valley, announced major layoffs Thursday as the economy continues to darken for Big Tech.
The tough economic times are also hitting Amazon, which announced that it would freeze new corporate hires amid a highly uncertain economic environment.
The bloodletting came as the tech world awaits major layoffs at Twitter after the takeover by Elon Musk for $44 billion.
Media reports said that Musk is preparing to eliminate thousands of jobs as early as Friday in an attempt to find ways to help pay for the massive buyout.
Stripe, a payments company based in San Francisco and Dublin, said it was going to slash 14 percent of its staff telling its employees it had “overhired for the world we’re in.”
The company said this would return staff to the 7,000 people it had in February.
“We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets and sparser startup funding,” Stripe CEO Patrick Collison wrote in a note to staff.
Ride-hailing app Lyft, a rival to Uber, said it was letting go 13 percent or 683 non-driver employees. It cited a likely US recession and the rise in insurance costs for drivers.
The wave of layoffs comes just after a downbeat earnings season for most tech giants, with Facebook-owner Meta seeing its share price plummet by 73 percent this year to its lowest level since 2015.
Apple reported solid profits on rising revenues, but its iPhone sales missed estimates while it saw slowing growth in services revenues.
“Amazon’s hiring freeze sends a clear and unfortunate signal that the mood music of the retail and consumer economy is shifting,” said GlobalData managing director Neil Saunders. “The heady days of growth have now ended and have given away to an environment in which more caution is necessary to protect the bottom line,” he added.
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