June 22 (Reuters) – One by one, in the last week of May, Twitter Inc (TWTR.N) called some members of its new hire class who had recently graduated from college and revoked their job offers in 15 minutes. calls, according to some of the recipients.
“It was traumatic,” Iris Guo, an associate product manager based in Toronto, told Reuters. She received the bad news on a video call at 10:45 pm that her position had been eliminated. She has since raced to find a new job to secure her US work visa.
More than 21,500 tech workers in the United States have lost their jobs so far this year, according to Layoffs.fyi, a website that tracks job cuts. The number of tech layoffs in May soared 780% in the first four months of the year combined, according to outplacement services firm Challenger, Gray & Christmas.
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But recent graduates like Guo, who graduated from the University of Waterloo and studied financial management and computer science, represent a new dimension for the cuts, as their nascent careers are snuffed out before they even begin. The trend reflects a new austerity sweeping through some parts of the tech industry, such as crypto-backed companies and venture capital.
For crypto companies, the belt tightening is due to the recent drop in cryptocurrency prices, and venture capital-backed companies are also cutting costs to avoid returning to the market for additional funding, said Kyle Stanford, senior equity analyst at Pitchbook risk.
Crypto firm Coinbase Global Inc (COIN.O) laid off 18% of staff this month, payments firms Klarna and Bolt Financial collectively laid off more than 900 people, while big names like Meta Platforms Inc, Lyft Inc (LYFT.O) and Uber Technologies Inc. (UBER.N) said they will slow or freeze hiring.
In what appears to be a counter-trend to the Great Layoff of 2022, when legions resigned to new jobs, some tech job seekers now face cost cuts and a hiring freeze amid four-decade inflation, a war in Ukraine and the current pandemic.
In the case of those about to take to Twitter, the whims of billionaire Elon Musk also caused stress. Musk has agreed to buy Twitter for $44 billion, but his recent tweets have raised questions about when and if the acquisition will be completed. see More information
To be sure, hiring in the tech sector as a whole has remained strong, according to experts from recruiting and consulting firms. Technology roles in the healthcare and finance industries are strong, as well as in the information technology field, said Thomas Vick, Texas regional director for the technology practice at human resources firm Robert Half.
But for the new class of new hires out of college, losing their job offers now is especially damaging, as they’ve said they’re locked out of the likes of Meta Platforms, Alphabet Inc (GOOGL.O) Google and other tech giants, which already secured their new cohort of recruits.
Lucas Durrant, an electrical engineering graduate from Canada, was ready to start his new job as a software engineer at Bolt last week. While on vacation a few weeks ago, he received an email informing him that his offer was rescinded. Bolt announced he would begin the layoffs in late May, citing economic conditions.
“It feels a bit like a race against the clock before we see a bigger economic crisis,” Durrant said. “Soon, I will also be competing against people who will graduate in 2023.”
At least 40 recent college graduates have lost job offers in recent weeks, according to LinkedIn posts and Google spreadsheets that have circulated online to help those affected find new positions.
On Tuesday, 22 recent graduates were listed on a spreadsheet as having their offers terminated from Twitter and nine people were listed on a separate spreadsheet for Coinbase.
In a statement, Twitter said it recognized that rescinded offers could put candidates in a difficult position and said it was offering compensation to those affected.
Coinbase pointed to a June 2 blog post that said the decision to rescind several offers was not made lightly, but was “necessary to ensure that we are only growing in the highest priority areas.”
Chloe Ho, a recent graduate of the University of California, Davis and originally from Hong Kong, has until September 29 to find a new job or be forced to leave the United States. Ho had accepted a position as a content marketing specialist for an online grocery company called Weee! before the post was terminated.
As a non-US citizen who needs a new employer to sponsor her work visa, “my options are very limited,” she said.
Ho said he canceled his lease on a new apartment in the San Francisco Bay Area, dropped plans for a vacation with friends and will now spend the next three months making contacts for a new job during the day and submitting applications at night. “I had planned everything around this job,” she said.
Many affected graduates took to LinkedIn to express their disappointment, detail how the termination offers changed plans for cross-country moves, and ask for referrals for new companies.
Graduates who spoke to Reuters said they were surprised at the level of outreach of the people who offered to help. Still, the pain of losing their dream jobs remained.
A recent college graduate who was about to join Coinbase and did not want to be named due to his ongoing job search said that just a week before he lost his job offer, he received an email from Coinbase with the assurance that the company does not plan to roll back existing offerings.
“I was disappointed for a few reasons. I didn’t think the leadership would make that decision,” he said.
While companies can save some money in the short term, they run the risk of “potentially catastrophic” reputational damage, said Brian Kropp, distinguished vice president of Gartner’s human resources practice.
“Just think how unfair this is to the people you’re rescinding the offer from,” he said. “You are putting them in a painful situation.”
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Reporting by Sheila Dang in Dallas Edited by Kenneth Li and Matthew Lewis
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