Yahoo Finance’s Ines Ferre joins the Live show to discuss hiring trends among tech companies like Netflix and Meta.
BRIAN SOZZI: Twitter isn't the only tech company clamping down on employee costs, tech layoffs have spread to Netflix as the streaming giant announced 150 cuts across the company following its first subscriber loss in a decade. The layoffs were mostly in the United States and represent about 2% of Netflix's workforce. Joining us now to share the details is Yahoo Finance's, Ines Ferre, Ines?
INES FERRE: Yeah, Brian, and we have been noticing a trend when it comes to tech companies and startups, and that is that many of these are now announcing layoffs or hiring freezes. You just mentioned Netflix, the streaming giant announcing 150 people that have been laid off but also we are taking a look at other companies which have been announcing hiring freezes, Wayfair being one of them, yesterday announcing that it was going to implement a 90-day hiring freeze.
And the bottom line is that companies are now seeing that the era of free easy money is winding down, borrowing is now more expensive, a lot of these companies' stock prices have plummeted. And they have spent a lot on hiring new people during the pandemic. In some cases, maybe they overhired a bit. So now they are seeing a slowing growth, slowing demand. And so they are taking action accordingly.
In fact, let's show you the statement that Wayfair sent to us yesterday where the company said in part, "we see a great deal of uncertainty in the overall economy and believe it's prudent to make some adjustments that will allow us to control our own destiny." And Netflix said that it's seeing slowing revenue growth and that means that it has to slow its cost growth as a company. So again, these companies seeing the clouds ahead and they're taking action.
BRAD SMITH: We'd also seen this yesterday from a company in Coinbase. When you talk about how much demand perhaps has either decelerated or on some ends in the case of Netflix, declined, where that directly impacts what their headcount looks like in order to support the business going forward too?
INES FERRE: Yeah, that's right. And so you've got also in fact, Wall Street that has cut, slashed the GDP forecast. So they're seeing ahead that there's a slowdown, there may be a slowdown in demand. And also I do want to point out I spoke to Matt Maley from Miller Tabak, and he had an interesting point, he said with a lot of these tech companies also it is still a fierce market to get good tech talent. Salaries have gone up, so they are going to try and protect their best talent at all costs. So perhaps that means slashing some of the workers that they may not need in order to protect that core talent to keep the business growing and going.
BRAD SMITH: Look, we're going to continue to track to see exactly where more of the headcount either reductions or just looking across where those actual roles are necessary to keep on to support the business growth going forward from here. We know you will as well, Yahoo Finance's own, Ines Ferre.