Taxi giant Lyft will freeze all hiring in the United States until the end of the year, just days after buy-now-pay-later (BPNL) leader Klarna embarked on its second round of layoffs this year.  

Lyft, which cut nearly 60 jobs in July, has been having a hard time with increasing expenses as experts warn of a looming recession.

Despite going on to clock in a record quarter in August after cutting costs, the company warned that it would continue to face challenges due to rising inflation and insurance costs.

The California-based company’s stock plummeted by over 68% in 2022, Reuters reported.

As well as Lyft’s freezing of new employment, Klarna has embarked on its latest round of firings just four months after it let go of 10% of its workforce.

Camilla Giesecke, Klarna’s COO, said the BPNL giant needed to make further cuts to a number of departments, including IT and recruiting, in order “to reflect the more focused nature of today’s Klarna”.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Lyft and Klarna aren’t alone with their talent turmoil

Lyft and Klarna aren’t the only suffering from hiring freezes and layoffs. Robinhood, the stocktrading app that went public last year after the pandemic set its growth into hyperdrive, announced in April that the fintech would lay off 9% of its staff.

Australian BNPL company BizPay laid off 30% of its workforce in May, quoting tougher market conditions as the reason behind it. Then Mainstreet’s CEO announced on Twitter that about 30% of its workforce would be shown the door.

The fintech sector is not alone. The tech industry in general has made similar layoffs. Home-workout startup Peloton axed 2,800 roles in February. Netflix chopped its staff numbers at its fan site Tudum in May.

On Deck, a matchmaker for VCs and founders, has also reportedly laid off 25% of its staff. Customised celebrity video platform Cameo has fired 25% of its staff.

Not enough being done to create new talent

While the looming threat of a recession and the Great Resignation following the pandemic have certainly created more strain on businesses’ ability to retain talent, there are also other factors to consider.

Mark Chaffey, CEO and co-founder of Hackajob believes not enough is being done to create new technical talent, despite the demand growing.

Chaffey says that salary expectations in the tech industry are at an all-time high, putting more of a strain on companies.

“Salary has always been a big topic of discussion when it comes to tech jobs especially as the demand for talent continues to soar whilst the supply struggles to catch up,” Chaffey said.

“We’ve seen this over in the US where the average tech salary is a staggering 120% higher than in the UK. The report shows that 16% of candidates have declined a role as it didn’t meet their salary expectations.

“If they think a prospective company is being tight-fisted, they may begin to imagine what else the company could be ungenerous with.”

GlobalData is the parent company of Verdict and its sister publications.