May 2, 7:33 am
Inflation and high interest rates are weighing down on businesses, leading some companies to cut back on their workforce and hiring plans. Among these companies are Lyft, Pearson, and Morgan Stanley.
Lyft ($LYFT), the ride-hailing giant, recently announced that it would be cutting 26% of its workforce, or approximately 1,072 employees, as part of a restructuring plan aimed at boosting profits. The company is also scaling back on its hiring plans as Job postings on popular job sites have dropped by 40% since March.
The cuts and drop in job postings have had an impact on the morale of Lyft's current employees. According to popular job review sites, only 43% of employees report having a positive business outlook, down by 20% compared to just a year ago. Lyft is scheduled to release its first-quarter earnings results on May 4, and it remains to be seen how the restructuring plan will affect the company's financial performance.
Pearson ($PSO), the digital learning company, has also seen a decline in its number of open positions in recent weeks. From an average of 2,000 open positions per month, the number has dropped by 40% to 1,200 open positions. This could be a sign that the company is bracing itself for the impact of AI on the industry. Pearson had recently published first-quarter results that beat its own forecasts, but the declining number of job postings suggests that the company may not be as ChatGPT-proof as it claims to be.
Morgan Stanley ($MS), the New York-based bank, is also feeling the effects of the tough market conditions. The company has cut its open positions by 80% since May of last year, from 5,200 to around 1,000 currently. It has also been reported that Morgan Stanley plans to eliminate approximately 3,000 positions by the end of June, which is equivalent to about 5% of the bank's workforce. This move is expected to affect investment banking and wealth management divisions in particular.
The bank's first-quarter earnings report showed higher costs and lower revenue, especially in these two divisions.
The tough market conditions are forcing companies to make difficult decisions about their workforce and hiring plans. As businesses struggle to navigate these challenges, it remains to be seen how they will adapt and emerge stronger in the long run.
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