Shares of ZipRecruiter (ZIP 2.07%) are plunging 19.4% at 11:01 a.m. ET Wednesday. The online hiring platform reported fourth-quarter earnings after the market's close yesterday and indicated a "continued softening in the hiring environment" would cause full-year 2023 revenue to plunge 23% to $179 million at the midpoint of its guidance.
ZipRecruiter said employers are engaged in wholesale firing of employees or otherwise reducing their recruiting budgets, meaning this would be a particularly challenging period for the job search site.
There have been growing fears of a recession as rising interest rates, persistently high inflation, and stubborn energy prices weigh on the economy. There's a disconnect as well between the somewhat rosy employment picture painted by the U.S. Bureau of Labor Statistics, which showed unemployment at 3.4% in January, the lowest it's been in 54 years, and the conga line of companies reporting mass layoffs.
Amazon announced it was firing 18,000 workers; Alphabet is shedding 12,000; Microsoft 10,000; Walt Disney 7,000; and Goldman Sachs 3,200. Dozens of other companies have also said they were firing hundreds or thousands of workers.
While it increases ZipRecruiter's pool of available talent, the prospects for helping them land a job are dimming considerably.
The economy itself is showing a disconnect between the deteriorating situation and the consumer response to it. Spending surged 3% in January, far ahead of the 2% increase economists were anticipating, which is likely going to push the Federal Reserve to maintain its aggressive interest rate policy.
With growing demand for jobs pitted against declining opportunity, ZipRecruiter is going to find it extremely difficult for the rest of the year and possibly beyond.