Uber becomes latest tech company to announce hiring squeeze

Online taxi, distribution and delivery platform Uber is the latest prominent tech company to announce cutbacks on recruitment.

CEO Dara Khosrowshahi has said the firm would put a squeeze on its hiring process as well as cutting back on other costs owing to difficult market conditions.

"We will treat hiring as a privilege and be deliberate about when and where we add headcount," Khosrowshahi said in an email to employees seen by CNBC. "We will be even more hardcore about costs across the board."

He added: "It's clear that the market is experiencing a seismic shift and we need to react accordingly."

Having risen to unprecedented highs during the pandemic, the US Nasdaq Composite index, which primarily features technology stocks, has fallen for five straight weeks, representing its longest losing streak for a decade. Some investors are pulling out of the technology sector, which is seen as overvalued in the face of inflationary pressures and concerns about the impact of Russia's invasion of Ukraine.

Uber's stocks have dropped 35% since it went public in 2019, and its rival Lyft has lost 70% in that time; Lyft suffered a 36% drop in its share value last Wednesday after announcing poor results. Other tech stocks have fell last week too, including Cloudflare (down 24% forecasting a possible loss this quarter) Confluent (down 23% after disappointing financial results), Amazon (down 6%) and Microsoft (a 1% drop).

High petrol prices are another factor that has a direct impact on companies like Uber and Lyft.

Unlike Lyft, which is spending more on marketing and increased incentives to attract drivers, Khosrowshahi said Uber would be cutting back on spending.

"We have to make sure our unit economics work before we go big. The least efficient marketing and incentive spend will be pulled back," he said.

Uber's reported increased revenues of $6.9 billion for the first quarter of 2022 as pandemic pressures eased, but is still posted a $5.9 billion loss for the quarter.

Uber is not the only major tech company to apply the brakes to its recruitment process. Last week, Meta extended a hiring freeze to mid-level and senior roles.

"We experienced a further deceleration in growth following the start of the Ukraine war due to the loss of revenue in Russia as well as a reduction in advertising demand both within Europe and outside the region," said Meta CFO David Wehner. Meta stocks are down about 40% this year.