U.S. tech companies yank job offers, leaving college grads scrambling

By Sheila Dang

(Reuters) - One by one, over the last week of May, Twitter Inc rang up some members of its incoming class of new hires who had recently graduated from college and revoked the job offers in 15-minute calls, according to some of the recipients.

“It was traumatic,” Iris Guo, an incoming associate product manager living in Toronto, told Reuters. She received the bad news in a 10:45 p.m. video call that her position had been eliminated. Since then, she has raced to find new employment in order to secure her U.S. 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 monitors job cuts. The number of tech layoffs in May alone skyrocketed 780% over the first four months of the year combined, according to outplacement services firm Challenger, Gray & Christmas.

But recent college graduates like Guo, who graduated from the University of Waterloo and studied financial management and computer science, represent a new dimension to the cutbacks as their nascent careers are eliminated even before they begin. The trend reflects a new austerity sweeping across some parts of the tech industry such as crypto and venture capital-backed companies.

For crypto firms, the belt-tightening is due to the recent crash in cryptocurrency prices and venture capital-backed companies are also cutting costs to avoid going back to the market for additional funding, said Kyle Stanford, senior analyst for venture capital at Pitchbook.

Crypto firm Coinbase Global Inc laid off 18% of staff this month, payments firms Klarna and Bolt Financial collectively laid off over 900 people while major names like Meta Platforms Inc, Lyft Inc and Uber Technologies Inc have said they will slow or freeze hiring.

In what appears to be a counter trend to the Great Resignation of 2022, when legions quit for new jobs, some tech job-seekers now face cost cuts and hiring freezes amid four-decade-high inflation, a war raging in Ukraine and the ongoing pandemic.

In the case of those who were poised to join Twitter, the whims of billionaire Elon Musk have 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.

To be sure, hiring in the tech sector as a whole has remained strong, according to experts from staffing and consulting firms. Tech roles in the healthcare and finance industries are strong, as well as in the information technology field, said Thomas Vick, a Texas-based regional director for staffing firm Robert Half’s tech practice.

But for the incoming class of new hires out of college, losing their job offers now is especially damaging as they said they are locked out of companies like Meta Platforms, Alphabet Inc's Google and other tech giants, which have already secured their new cohort of recruits.

Lucas Durrant, an electrical engineering graduate from Canada, was set to start his new job as a software engineer at Bolt last week. While on vacation a few weeks ago, he received an email stating that his offer was rescinded. Bolt announced it would begin layoffs in late May, citing economic conditions.

“It feels a bit like a race against the clock before we see a bigger economic downturn,” said Durrant. “Pretty soon, I’m also going to be competing against people graduating in 2023.”

LIMITED OPTIONS