Uber, Meta to reduce hiring as stocks slide

Is winter coming already for the US tech sector?


Some tech companies are tightening their belts as they adjust to ongoing financial turbulence, with Uber and Meta both looking to reduce expenses and hiring.

Uber CEO Dara Khosrowshahi told employees in an internal email that the ride-hailing service is going to try harder to stop losing so much money. Khosrowshahi's email, obtained by CNBC's Deirdre Bosa, begins, "It's clear that the market is experiencing a seismic shift and we need to react accordingly."

The memo says hiring will be more cautious and promises cost cutting.

Citing the need to reassure investors amid market uncertainty, Khosrowshahi's missive says, "Channeling Jerry Maguire, we need to show them the money. We have made a ton of progress in terms of profitability, setting a target of $5 billion in adjusted EBITDA in 2024, but the goalposts have changed. Now, it's about free cash flow."

Uber last week reported a net loss of $5.9 billion, of which $5.6 billion was due to investment losses in other companies, specifically Grab, Aurora, and Didi. Stock-based compensation expenses also cost it $359 million.

That's nearly as much as the $6.77 billion Uber lost in 2020, but shy of the $8.51 billion set alight by the company in 2019. Somehow in 2021, the company managed a net income of $892 million.

Uber's stock is down 46 percent over the past six months. The ride-hailing biz did not immediately respond to a request for comment.

Meta Platforms' stock, meanwhile, is down 40 percent in the past six months. Much of that drop followed stalled audience growth, a weak revenue forecast, and the company's annual revenue report in February in which the firm disclosed that its VR unit, Reality Labs, had spent $12.5 billion to earn $2.3 billion – a $10.2 billion loss and about as much its net income – building what will perhaps be a metaverse business.

We note that technology stocks, among other industries, are down in general; the S&P 500 just hit a 52-week low.

In April, Meta reportedly froze the hiring of entry-level and mid-level engineers, with limited exceptions, and has now expanded its hiring limitations.

"We regularly re-evaluate our talent pipeline according to our business needs and in light of the expense guidance given for this earnings period, we are slowing its growth accordingly," a Meta spokesperson told The Register via email. "However, we will continue to grow our workforce to ensure we focus on long term impact."

The Register understands Meta doesn't have any immediate plans for layoffs and characterizes the move as a shift away from aggressive growth targets set at the beginning of the year. The company attributes its retrenchment to Apple's iOS privacy restrictions, which hurt ad revenue, and to Russia's invasion of Ukraine. Wall Street however is reportedly none too pleased with the firm's VR spending, which was nearly $3 billion during the first three months of the year.

In Q1, 2022, Meta apparently recruited more engineers than it did during all of 2021. The ad biz added 5,800 hires, mostly in technical roles, and finished the quarter with 77,800 full-time employees, up 28 percent from the same period last year.

Things haven't been great for companies that went public last year, either. According to CNBC, of 53 tech-related firms that went public in 2021 via IPO or direct listing, all but three are below their initial stock price and half are down more than 50 percent, including Robinhood, Coinbase and Rivian. ®


Other stories you might like

  • Lonestar plans to put datacenters in the Moon's lava tubes
    How? Founder tells The Register 'Robots… lots of robots'

    Imagine a future where racks of computer servers hum quietly in darkness below the surface of the Moon.

    Here is where some of the most important data is stored, to be left untouched for as long as can be. The idea sounds like something from science-fiction, but one startup that recently emerged from stealth is trying to turn it into a reality. Lonestar Data Holdings has a unique mission unlike any other cloud provider: to build datacenters on the Moon backing up the world's data.

    "It's inconceivable to me that we are keeping our most precious assets, our knowledge and our data, on Earth, where we're setting off bombs and burning things," Christopher Stott, founder and CEO of Lonestar, told The Register. "We need to put our assets in place off our planet, where we can keep it safe."

    Continue reading
  • Conti: Russian-backed rulers of Costa Rican hacktocracy?
    Also, Chinese IT admin jailed for deleting database, and the NSA promises no more backdoors

    In brief The notorious Russian-aligned Conti ransomware gang has upped the ante in its attack against Costa Rica, threatening to overthrow the government if it doesn't pay a $20 million ransom. 

    Costa Rican president Rodrigo Chaves said that the country is effectively at war with the gang, who in April infiltrated the government's computer systems, gaining a foothold in 27 agencies at various government levels. The US State Department has offered a $15 million reward leading to the capture of Conti's leaders, who it said have made more than $150 million from 1,000+ victims.

    Conti claimed this week that it has insiders in the Costa Rican government, the AP reported, warning that "We are determined to overthrow the government by means of a cyber attack, we have already shown you all the strength and power, you have introduced an emergency." 

    Continue reading
  • China-linked Twisted Panda caught spying on Russian defense R&D
    Because Beijing isn't above covert ops to accomplish its five-year goals

    Chinese cyberspies targeted two Russian defense institutes and possibly another research facility in Belarus, according to Check Point Research.

    The new campaign, dubbed Twisted Panda, is part of a larger, state-sponsored espionage operation that has been ongoing for several months, if not nearly a year, according to the security shop.

    In a technical analysis, the researchers detail the various malicious stages and payloads of the campaign that used sanctions-related phishing emails to attack Russian entities, which are part of the state-owned defense conglomerate Rostec Corporation.

    Continue reading

Biting the hand that feeds IT © 1998–2022