Yahoo Finance’s Dan Howley joins the Live show to discuss the hiring freeze among tech companies.
AKIKO FUJITA: Well, the recent slide in markets slamming the tech sector with layoffs and hiring freezes hitting major tech companies. Among the big losers, more recently announcing, Coinbase announcing layoffs that would cut nearly 20% of its staff alongside real estate tech company Redfin and Compass. Joining us more to discuss is Yahoo Finance's Dan Howley. Dan, we should point out, tech kind of leading the gains today in the session in terms of the sectors, but it has been a brutal decline, especially for these high-growth companies. And we've seen that reflected in the layoffs.
DAN HOWLEY: Yeah, and tech, obviously, kind of always the one to benefit the most and hurt the most when it comes to any kind of changes in the market. So maybe we're seeing the kind of rebound from the past few days. But we got to talk about these layoffs and these hiring freezes at some of these companies. And you said, obviously, we had Redfin, Compass. Coinbase, they're having layoffs as well.
Then we have just some other companies out here that you wouldn't necessarily expect. Obviously, we knew about Netflix for a while. They had announced, after that just atrocious quarter that they had. Tesla, Elon Musk saying that they wanted to lay off some of their salaried workers, but they are, it's worth pointing out, hiring some of the hourly factory workers.
But then you have Bird Global, Stitch Fix, Carvana, Robinhood, Peloton. Those are names that have been kind of under the gun for a little bit. Peloton, especially, they really just kind of blew up at the early part of the pandemic. And then everyone was like, $4,000 for a bike? Woah, what? And I think most people were like, no, I'll just get, like, a $20 bike and then strap my iPad to it and that'll be it. But you know, it's not just--
AKIKO FUJITA: I've seen a lot of people do that, actually, yeah.
DAN HOWLEY: Hey, man, I get it, right? You know, I don't even need to pay for Peloton. I'll just get the Apple Fitness+ thing. But as far as slowdowns, not just layoffs, it's slowdowns as well. And that's what we're seeing big tech kind of content with now-- Intel slowdowns, Nvidia slowdowns. Microsoft specifically pointing out their Teams and Office groups are having slowdowns. Lyft, Uber, Snap, Wayfair, Meta-- Twitter is kind of a function of the Elon Musk takeover, where they were like, we don't know what to do right now. Who knows who's going to own us. We'll just hold off. And they also-- there were reports that they were pulling back on verbal agreements to bring people on.
AKIKO FUJITA: So there's company-specific stories. Yes, we are seeing a broader decline when we talk about valuations of these companies. How much of this is just about the shareholder pressure that's coming in? I mean, we heard that from a company like Uber that said, it is about profitability now. So these are companies that really focused on high growth, growth at all costs. But it's not necessarily-- if you look at a company like Netflix, it's not on the verge of a collapse.
DAN HOWLEY: No.
AKIKO FUJITA: It's just a resetting of expectations, right?
DAN HOWLEY: Right, it's that and-- that's the perfect way to put it is that it's each company's own individual problems are coming out of the wash almost as we see this market downturn. So you obviously have Intel, Nvidia-- they're dealing with issues related to chip availability. Nvidia is seeing some pullback potentially into the cloud space. Microsoft, they said that it's pressure from foreign exchange.
We have Twitter, obviously, the Elon Musk stuff. Meta, they're still dealing with the issues. I mean, they talk about Ukraine being a problem, as far as ads go into the future, as well as iOS privacy changes, right? So it's a lot of different things here. Redfin, they were saying-- the CEO was saying that they just need to start making money.
So it is that each of these companies are all hurting as a result of the way the market's going right now, despite kind of rebounding a little bit. But they have their own underlying issues that now they're saying, OK, if we're under pressure, we're going to have to deal with these. This is how we're going to do it. We're either going to freeze hiring, or we're going to have layoffs.
And you know, I think it is worth pointing out that the stalwarts are seemingly just doing slowdowns so far. Google has-- Alphabet, Google-- hasn't even announced anything as far as slowdowns or layoffs. Amazon basically saying, look, we just went hog wild hiring people to get things out the door.
AKIKO FUJITA: Right, especially over the last few years.
DAN HOWLEY: Right. But buying up real estate, there's talk of them trying to sublet some of their warehouses or unload them. They have land that they haven't even built on yet that they're just holding on to for the future. So the stalwarts seem to be holding on.
AKIKO FUJITA: Yeah.
DAN HOWLEY: But a lot of smaller companies, even the chip stuff, that seems to be hurting.
AKIKO FUJITA: Yeah, important to differentiate what we're hearing from Microsoft and Amazon is not the same as what we're seeing at a place like Coinbase.
DAN HOWLEY: No, no, not at all.
AKIKO FUJITA: OK. Dan, you've got the story up on the site, so you can go and read that too. Thanks so much for that. Well, those layoffs at tech-adjacent real estate companies indicating--