The recent widespread trend of hiring freezes and layoffs at large tech companies has one notable exception. TikTok is adding around 1,000 engineers in California, in contrast to the 11,000 jobs cut at Meta or the drastic downsizing from the 7,500 workers at Twitter when it was bought by Elon Musk. All this despite having reduced its advertising revenue forecast for this year from $12 billion to $10 billion due to macroeconomic circumstances.
Shou Zi Chew, CEO of the Chinese platform, said at a recent Bloomberg event in Singapore that “at this stage of our growth I think our hiring pace is right for us”. The increase in staff on US soil is justified among other things by the platform’s interest in having US user data handled by a local team, in order to avoid the increasing scrutiny by national authorities over its ties with the Chinese government and the potential national security problems they may cause. And it also corresponds with the expansion of the social network’s business into e-commerce.
This makes TikTok a notable exception in a sector that in recent weeks has announced successive mass layoffs. In addition to those already mentioned at Meta and Twitter, there are 10,000 at Amazon, around 1,200 at Snap and around 500 at Netflix, among others. Several of these processes have in common a significant impact on the accounts of the withdrawal of advertising planning due to economic uncertainty and a reduction in consumption for the same reason. Moreover, in several cases, their managers recognise that they hired too many people in the context of the pandemic because they thought that some of the changes it entailed would be stable, which has not been the case.
This was acknowledged by Mark Zuckerberg, who in just two years had expanded Meta’s workforce by 60% to take advantage of the growing wave of e-commerce, a trend that Amazon also wanted to capitalise on with greater investment in staff and infrastructure. Reality has shown that consumers have not particularly changed their habits and largely prefer to return to face-to-face shopping if they have the opportunity.
The Chinese platform maintains a growth roadmap for its US workforce, unlike all its rivals, which are reducing or freezing it.
All of these factors are compounded by the impact of iOS privacy restrictions on advertising planning at some of these companies. Facebook has been particularly hard hit, as has Snap, as advertisers now have to spend more for poorer results on Apple’s mobile devices. This explains why it has increased advertising positions or explored paid features while at the same time trying to contain investment in the metaverse, which is absorbing a lot of resources without apparently good results so far.