Tech Giants Cut Jobs and Launch a Hiring Freeze Thanks to Biden Tanking the Economy

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kei907 / shutterstock.com
kei907 / shutterstock.com

As the economy tanks like a sports team looking to get the top draft pick, economists are becoming growingly concerned with the prospect of keeping businesses afloat, and profits within check. To do this, they are having to result to some drastic measures. Unfortunately, American consumers can only afford so much for price increases, and many are barely scraping by as it is.

Ridesharing app Lyft and payment processing startup Stripe are in this exact situation now. For them, the best possible answer is to make do with fewer employees. Lyft decided to pink slip 13% of their current staff, for a total loss of 700 jobs, according to the Wall Street Journal. Stripe is undergoing a 14% cut, bringing them to under 7,000 employees — implying a cut of at least 1,000 employees. In both instances, the companies listed fears of the ever-growing recession and deeper macroeconomic challenges as their reasons for the layoffs.

Even Amazon is not immune to the problems. November 3rd, they announced a corporate hiring freeze due to the extreme economic conditions. In a letter to Amazon staffers, senior vice president of people experience and technology Beth Galetti attempted to put their minds at ease by explaining how ambiguous and perplexing the times ahead will be as she spoke about the economic conditions.

Lyft co-founders Logan Green and John Zimmer issued a written statement to employees about the conditions. “We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives. Still, Lyft has to become leaner, which requires us to part with incredible team members.”

Stripe’s co-founders Patrick and John Collison shared a similar message with their employees. According to the Collisons “We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown. We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”

Despite these challenges, Lyft is not expecting to miss third-quarter projections, or 2024 financial targets according to paperwork they filed with the SEC. For them, these cuts were done in the name of being proactive to ensure the company remains performing strongly in the fourth quarter and well beyond.

These kinds of cuts are bound to happen when you mix conservative business models with liberal ideals. Amazon has been pushing the liberal agenda the entire way and banking off it every step of the way. While Bezos has certainly made a mint off the business model, his recent injection of liberal beliefs and policies makes it hard to sustain the company.

Lyft is a concept born with a conservative business model and setup. The taxi was originally a conservative idea for the man about town who didn’t have his own car, but who refused to wait for the bus. Pure capitalism there. Lyft simply brought it into the 21st century, but then bastardized it in recent years with their policies for drivers, and giving passengers free rides by allowing them to manipulate the system. Feeling as if the passenger must need it more, they took advantage of drivers and cost them money.

Stripe is the newest of the three, and the ideas they have for payment transactions revolve all around the idea that capitalism is a good thing and people spending money. When people aren’t using their cards, Stripe isn’t able to get paid. Businesses aren’t looking to change their model when so many processing companies are offering great deals to stay with them. Thus, their business model is incompatible with the current times.

All three have the ability to succeed and flourish. They just need to accept the conservative policies to go with their conservative business roots. Without it, they are doomed to failure.