With their powerful size they seemed untouchable but finally the big technology companies have succumbed to the inflationary crisis and the drop in valuations that companies in the digital sector are experiencing after the end of the pandemic.
In recent weeks, Apple, Amazon, Meta (Facebook), Microsoft and Alphabet (Google) have announced that they are going to put the brakes on hiring workers, a symbol of a change of stage. In the last decade (see graph), their workforces have been expanding by 5% per year or even more, especially as a result of the pandemic, which triggered the digital needs of society.
“There are serious times ahead and we need to execute perfectly. Growth is slow and the teams should not wait for the arrival of new engineers or budgets, ”a Meta manager warned the workers in a statement published in The Verge. In the same vein, Google's parent company expressed itself in a report to investors: "Like other companies, we are not immune to the headwinds of the economy."
A few days before the presentation of results for the first half of the year, the most striking fact that reflects the change of era is the collapse of its stock price in the last six months. In the case of Meta (Facebook) the share has plummeted -45%, Microsoft's -36%, Alphabet (Google), -23%, Amazon -22% and for its part Apple has fallen by - 8%. The situation, caused by the inflationary crisis, the tensions in the supply chain and the return to the pre-pandemic world, has forced measures to be taken to cut spending. And the main game that has suffered has been that of salary costs. Tech workers are at the forefront of their innovation and command stratospheric salaries.
Among the five big tech, the most severe response so far is that of Microsoft. In May, it announced that it was going to freeze new hires in the short term and, a couple of weeks ago, it stepped up its bet by announcing the layoff of workers in all its categories, especially in the cloud and cybersecurity divisions, a move that will affect less than 1% of its global workforce.
In the case of Meta (Facebook), the company had planned to recruit 10,000 engineers this year, especially to develop the metaverse, but earlier this month it announced that it would reduce the number to 7,000 or 6,000.
Amazon, a great exponent of the rise that technology companies experienced during the pandemic, has been reconsidering its growth for months. In fact, the firm led by Jeff Bezos has come to admit that it was wrong in oversizing the number of workers and its logistics capacity. Although it has not announced the brake on direct contracting, it has done so indirectly because it has paralyzed the construction of new warehouses globally, a movement that in Spain has stopped the opening of logistics warehouses in Reus, Celrà (Girona), Seville and Vitoria .
In the case of Google, the communications have not been as specific, although along the same lines as the rest, Alphabet has announced that it will stop signings throughout the year and that it will focus resources on priority areas. Finally, Apple sentenced last week the change of stage in the big technology companies. Although he did not give details, he announced the transfer brake in some areas during 2022 and 2023.
The decision of these large companies has had an impact in Silicon Valley but also wherever the subsidiaries of the multinationals are located. In Spain they all have a presence, mainly in Madrid and Barcelona. The news has already begun to resonate among Spanish technology professionals, who have missed the opportunity to join their teams remotely or in person. However, that has caused local digital businesses to breathe a little easier as the talent market is not as tight as it was at the beginning of the year.
"With their very high salaries, the big technology companies were very competitive with us and now we see that there are more workers available," notes Jordi Romero, co-founder of the Factorial start-up, specializing in human resources software. Sacha Michaud, co-founder of the delivery company Glovo, expresses himself along the same lines: “After a period with so much demand, we are noticing a slight increase in the availability of talent in Barcelona. There is less pressure due to the decision of the big technology companies and also the interest of foreign professionals to come to the city”. In contrast, Adevinta, owner of portals such as Infojobs or Fotocasa, has not yet noticed the impact of this phenomenon. However, the person in charge of the People division, Susana Vicente, admits that "it is possible that now, with the current context and less optimistic forecasts, the labor market will lose tension."
Whether or not the big technology companies will open the contracting tap again will depend on the situation and, at the moment, it seems little hopeful. In the words of the founder of Facebook, Mark Zuckerberg: “If I had to bet, I would say that this could be one of the worst crises that we have seen in recent history.”
