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What just happened? After forecasting a decline in GPU sales for graphics cards and consoles in the current quarter, Nvidia has become the latest tech giant to report a slowdown in hiring. The pessimistic outlook saw shares fall 6.7% in extended trading, despite the company beating analysts' expectations for revenue and earnings in Q1
Nvidia's revenue was up 46% year-on-year during the last quarter to $8.29 billion. It included a record amount of revenue from its data center business, which saw 83% YoY and 15% QoQ rises. But the company's future outlook wasn't so positive: it predicts a second-quarter revenue of $8.10 billion (+/- 2%), lower than analysts' average expectation of $8.45 billion. "Overall, the gaming market is slowing," said CEO Jensen Huang.
The slowdown is being blamed on factors impacting much of the global economy: Covid lockdowns in China and the Russia/Ukraine war, both of which are predicted to negatively impact Nvidia's bottom line to the tune of $500 million. Chief Financial Officer Colette Kress said (via Reuters) that the amount included about $400 million lost in gaming sales in China and Russia and another $100 million lost in data center sales in Russia. Inflation and rising energy prices are playing a part, too.
The New Indian Express reports that the lower-than-expected forecast will see Nvidia rein in its hiring to lessen the impact. Managers have been instructed via internal Slack messages only to make offers to the top 10% of interviewees. The messages reportedly added that hiring managers interviewing "diversity candidates" should "proceed as usual."
An Nvidia spokesperson confirmed the change in hiring policy to Protocol, adding that it was "to focus our budget on taking care of existing employees as inflation persists."
Nvidia has a busy second half of the year coming up with the launch of its RTX 4000 (Lovelace) graphics cards, but that hasn't stopped it from joining the likes of Lyft, Snap, Uber, Meta, Salesforce, and Coinbase in decreasing its rate and number of hires.