Layoffs rise as US economy slows

Companies from ride-sharing platforms to the mighty Amazon are either shedding jobs or putting hiring plans on hold as the U.S. economy slows.

Lyft said Thursday in a regulatory filing that it is cutting 13 percent of its workforce, or nearly 700 employees, as it moves to cut costs. The loss-making ride-hailing service has seen its sales shrink over the past year, while its shares are down 67% in 2022.

Payment services provider Stripe also announced layoffs Thursday, saying it was cutting 14 percent of its workforce, or about 1,000 employees. In an email to employees posted on Stripe’s website, CEO Patrick Collison said the company was preparing for “leaner times” amid worsening economic conditions.

“We face persistent inflation, energy shocks, higher interest rates, reduced investment budgets and thinner startup funding,” he wrote.

Stripe said it will offer at least 14 weeks of severance pay for all laid-off employees and more for those with longer tenure.

Twitter is another big tech company trying to cut costs. Bloomberg News reported that Elon Musk, who struck a deal with buy the social networking service last week for $44 billion, plans to lay off 3,700 employeesor about half of its workforce.

Tesla’s CEO wasted little time cleaning house, moving to fire Twitter’s CEO, CFO and top lawyer within hours of taking control, while other members of the company’s leadership team have also leave.

The US economy is growing, but recession fears remain


Also, moving to contain costs, Amazon executives are freezing hiring for its corporate workforce for at least the next few months, Beth Galetti, senior vice president of human experience and technology, said in a note posted on Amazon’s website on Thursday.

“We are facing an unusual macroeconomic environment and we want to balance our hiring and investment with being cautious about this economy,” he said.

The National Association for Business Economics recently predicted that the US will enter a recession within the next 12 months.

Despite rising tech layoffs and economic challenges affecting millions of Americans, U.S. unemployment remains near a five-decade low of 3.5 percent. Employers posted across the country 10.7 million job vacancies in September, up from 10.3 million in August, the Labor Ministry announced on Tuesday. And despite the flurry of corporate layoff announcements, the number of workers filing for unemployment benefits remains low, suggesting that even laid-off workers are finding new jobs fairly quickly.

“There’s a bit of a panic,” said Julia Pollack, chief economist at ZipRecruiter, citing the economy, technology and advertising sectors. “Companies are sitting on piles of cash and are very conservative, trying not to overhire. They probably won’t expand, they’ll still open new locations, and the big ribbon cutting will be postponed for another year.”

“We still have this incredible job market and an incredible shortage of candidates, but that gap between demand and supply is narrowing,” he added.

The government is due to release its employment report for October on Friday.

—The Associated Press contributed to this report.

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