The Pinterest Inc (NYSE: PINS) stock price has risen 11.3% this year amid layoffs as it looks to restructure its business to become a smaller, nimbler tech company as advertising revenues fall due to the challenging operating environment.
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In February, the social media company announced that it was laying off 150 of its 4,000 employees, representing 3.75% of its workforce. Since then, the company has been silent on further layoffs, but it recently announced that it would be giving up some of its office leases due to its lower headcount.
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Pinterest estimates it will incur charges between $100 million and $125 million while implementing the restructuring plan. The company’s job cuts come at a difficult time for tech employees, as many large tech companies slash roles to lower operating costs amid a dip in revenues.
Larger tech companies such as Facebook (now known as Meta) and Amazon.com have slashed tens of thousands of roles since October last year as advertising revenues dipped. Meta’s founder Mark Zuckerberg has been vocal about the efficiency gains at Meta since reducing its bloated workforce.
However, the rationale for slashing roles works at larger companies with many employees. Still, despite the thousands of job losses, the US has seen a significant surge in the number of smaller companies hiring new employees with experience working at larger firms.
Small and medium-sized enterprises (SMEs) have been the biggest gainers following the job cuts at the larger tech companies, which has created a flood of experienced tech workers. In the past, SMEs could not hire top talent since they could not afford to pay the massive salaries and bonuses offered by the bigger firms.
Therefore, now that there is such high availability of tech workers, the SMEs can snap up top talent at lower salaries that they can comfortably pay since they are the only ones actively hiring. Many tech workers are willing to take on new roles with less pay.
*This is not investment advice.
Pinterest stock price.
The Pinterest stock price has risen 12.46% in the past month and is up 11.26% since the year started.
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