Recent cutbacks in hiring at Facebook and Alphabet could be a signal that overall job growth has peaked after a “pretty healthy” rate of increase for much of this year, Citi’s Mark May told CNBC on Friday.
“We’re seeing early signs of maybe some slowdown in hiring as a forward indicator based on the number of job postings” at the two companies, the internet analyst told “Squawk Alley.”
Citi collects and analyzes job posting data at a number of internet companies to find clues about their outlooks. According to that data, openings at Facebook, particularly in HR, have declined since a peak in June. Postings at Google parent Alphabet, after remaining stable since May, diminished by 5 percent in October and 8 percent in November.
May says the trend is tied to Friday’s jobs report that showed the U.S. added 155,000 nonfarm payrolls in November, below an estimate for 198,000. About 237,000 jobs were added the month before. The market reacted positively to the report as investors hope the Federal Reserve would change course on its planned interest rate hikes, But a drop in technology stocks, coupled with worries over economic growth and U.S.-China trade, helped drive the major indexes lower.
Shares of Facebook were down 1.6 percent in late trading, while Alphabet was down 3.1 percent.
“Maybe we will see a little bit of a [slowing] of hiring going forward within the internet group,” he said.
Amazon, by comparison, looked to grow its Amazon Web Services workforce by 10 percent in that same time frame, but its job openings remain relatively low compared with its total head count. Shares of Amazon were down 4.2 percent in late trading.
“Amazon continues to be far and away the largest hirer in the group,” May said.
The major indexes continued to slide this week. On Friday, the Dow Jones Industrial Average was down nearly 2 percent, while the S&P 500 and Nasdaq Composite were down more than 2 percent.
Facebook, Alphabet and Amazon did not immediately respond to a request for comment.
