The Yahoo Finance Live team discusses workforce cuts at Polestar, Microsoft not providing raises to full-time employees this year, and layoffs in tech over the last 6 months.
AKIKO FUJITA: Well, job satisfaction may be at a 36-year high, but the job cuts are continuing. EV maker Polestar just the latest to announce it's eliminating 10% of its workforce. The firm attributed the cuts to delayed production for its Polestar 3 and a tough economic environment.
Meanwhile, Microsoft says the company will not provide-- or will not raise full-year full-time employees-- or raises for full-time employees this year. The tech giant slashed 10,000 jobs, under 5% of its workforce, in January in an effort to reduce costs, as revenue growth slows.
Seana, I think it's worth differentiating all these. We tend to kind of lump in all the cuts and say it's the macro environment. EV names specifically though, are really, really struggling in some way. I mean, Polestar just the latest. Rivian's had cuts. You've had Lucent announce cuts. Even the legacy names like GM and Ford have had cuts.
And this is really kind of an industry that's in transition, trying to find its footing, improve productivity. But also we've seen the stock down, questions about how quickly the demand will-- or how stable the demand will be. And then of course, the price cuts that we've been talking about--
SEANA SMITH: Yeah, exactly. And I think that's putting a lot of pressure on a number of these smaller makers. But actually, I guess you're also having-- GM was also offering a number of its employees buyouts as well. So I think the shift here to the EV space, which we know is more expensive, at least right now, to produce these types of vehicles, profit margins are under pressure. So a lot of these companies are having to adjust, some of these smaller companies, like Polestar, that was already having production issues, is obviously being forced to lay off employees just to survive in this environment.
Then we shift over to what we're seeing in the tech sector, Akiko. Obviously, a little bit different here because many of these companies scaled astronomically during the pandemic. They were hiring tens of thousands of employees. Their numbers of employees that make up their workforce today clearly double in some cases to what we had back in 2019.
So they're needing to adjust to this new normal, as we do move away from the pandemic. But when you take a look at these layoff numbers, 270,000 tech jobs have been cut on a global basis in the last six months. That's the latest data out from layoffs.com.
Intel was also out saying that they are cutting workers. Earlier this week, Reuters was reporting that Intel had already cut employee and executive pay earlier this year to try to get costs under control. So clearly, we're seeing pressure across sectors and management facing these tough decisions. They need to lay off workers in order to better position their company for profits here in the second half of the year.
AKIKO FUJITA: Well, and Seana, how many of those cuts have been followed by announcements from these companies who say, we just grew too quickly during the pandemic? We thought that demand would continue.
Now, Microsoft, I would argue, is more one of those legacy names. They've obviously built out a pretty healthy balance sheet. But they've even talked about the demand, especially the investment on the tech side, on their cloud side, some of that starting to wane as well because companies are turning a lot more cautious.
So on the one hand, you could say some of these companies, the tech companies, especially the startups, grew too quickly. But at the same time, they are feeling the pressure of the broader macro environment. And that, I would argue, is a bit different than what we're seeing on the EV side of things.