The whispers about a shrinking tech sector are getting stronger.
In many cases, they are also now moving beyond the predictions of economists and toward concrete steps on the part of companies.
After suffering its first-ever decline in daily active users last quarter, Facebook FB announced that it would slow down hiring to cut costs and realign its strategy going forward on May 5.
Three days later, Uber (UBER) also named a "seismic shift" in investor sentiment as the reason to significantly slow down its hiring.
Other areas in which it plans to cut costs include marketing and incentive spend.
Shares of both companies are down a respective 35% and 47% year-over-year after seeing major boosts during the early days of the pandemic.
"We will treat hiring as a privilege and be deliberate about when and where we add headcount," Uber CEO Dara Khosrowshahi wrote in an email to staff first obtained by CNBC. "We will be even more hardcore about costs across the board."
Who Else Is Slowing Down Hiring?
While Facebook and Uber are merely slowing down on new hires, a number of big tech companies has already started layoffs.
Online trading platform Robinhood (HOOD) laid off 10% of its workforce in April, while Netflix (NFLX) started layoffs just a few months after launching its fan site Tudum.
The news is alarming for workers and anyone hired during the pandemic-fueled upturn.
Startups, or experimental departments of larger companies, are particularly at risk.
After much fanfare about how CNN could uproot the streaming industry, CNN+ failed to take off the ground and shut down after just two weeks at the end of April.
After years of aggressive hiring, Amazon (AMZN) also recently came face to face with overstaffing.
"For companies experiencing pretty intense price pressures, there’s only so much they can raise prices, and they’re going to have to cut costs in other ways if they want to regain their lost profit margin, or at least try to retain some profit margin that they had pre-Covid," Peter Boockvar, chief investment officer at Bleakley Advisory Group, told Barron's.
"Labor is the biggest expense, so if you want to pull a lever that has influence on the cost side, it is your labor."
How Worried Should You Be?
But what one person calls a hiring shutdown another may call a "restructuring," depending on which companies are doing best at the moment.
According to recent jobs report released by the CompTIA industry association, 33,708 new tech job listing were posted from March to April.
The unemployment rate for the tech industry is just 1.3% but 3.6% across the U.S. overall.
While software developers and systems engineers/analysts dominated the list of posted jobs at a respective 3,613 and 3,126, telecommunications and data-processing specialists are also in strong demand.
California, Texas and Florida led the pack when it comes to numbers of tech-related job postings.
Even with the U.S. Bureau of Labor Statistics reporting that 428,000 jobs were added in April, the demand for labor is higher than what is needed to make up for an ongoing labor shortage.
Specialized skills in particular tend to get swept up by whatever company has more money at the moment.
"The job market is still very robust," Bill Armstrong, president of recruiting at Safeguard Global, a payroll and HR firm, recently told U.S. News.
"We are continuing to see a decrease in unemployment numbers and job openings are at all-time highs."
