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Tech HR moves show who has a chance to increase productivity – Bernstein (NASDAQ:META)


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The latest moves by big tech names to freeze hiring or cut staff prompted Bernstein analysts to find out what’s happening with continued headcount growth. exposure to the Internet – and what exactly the big names are doing. revenue per employee.

The number of layoffs in the industry spiked in November, Nikhil Devnani and team point out: to 53,000, from 23,000 in October. Meta . Platform (NASDAQ:META) and Amazon.com (NASDAQ:AMZN) bit the “bullet” to manage their expenses and shut down side projects with uncertain outcomes, while Alphabet (NASDAQ:GOOG) (GOOGLE) remains the “last pillar to collapse” in the big tech sector, they note.

“Mr. The market has made it clear that ‘growth at all costs’ will no longer be cut. And public companies will be structurally downgraded if they can’t show: (1) children.” path to sustainable returns and (generating free cash flow); and (2) an underlying model that can grow at a steady rate without zero-interest financing,” analysts about a new focus on profitability.

Some emerging Internet companies are finding themselves forced by the need to preserve cash, such as Wayfair (W), they note. For others, like Amazon and Meta, it’s about “improving capital management and appeasing shareholders.” Interestingly, it’s private Twitter (TWTR) could be an important case study in efficiency after cutting about two-thirds of the workforce: “Elon’s Razor” will test how efficiently such businesses can operate, Bernstein said. speak.

Digging deeper, they note large-cap stocks – Alphabet (GOOG) (GOOGLE) and Meta – still the most efficient by far on a per-employee and Amazon revenue basis (AMZN) action suggests it could have turned a corner there as well.

“That said, Snap(NYSE:SNAP) and Pinterest (pin code) saw the most improvement” when compared to 2019, and “META degraded the most as it increased hiring in non-revenue-generating positions (e.g. content moderation and metaverse) ).”

Among Internet market names, Uber (UBER) saw the most improvement in productivity on a three-year basis, thanks to pandemic-led staff cuts, “significant” delivery growth and higher prices. DoorDash (DASH) and Etsy (ETSYBernstein notes that ) has seen the most growth in headcount, offset by faster revenue growth – but those businesses still have some room to realize efficiency.

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