The end of the year is gradually turning into hell for the technology sector.
It’s a tsunami of bad news coming from technology.
For two years, the COVID-19 pandemic has seen the tech sector see at least some growth as the rest of the world has stalled. People only interact through technology companies’ products and services.
Now the economy is slowing, and the game for the tech sector is changing – but not in a good way. The industry has been hit hard while the world’s central banks are battling inflationits highest level in 40 years.
After leaving interest rates at almost zero, the United States Federal Reserve He has increased it since March to crush the soaring prices of goods and services, which have pummeled consumers purchasing power.
Many economists and business leaders say this monetary policy likely to cause a so-called hard landing in the economy, a Recession. These concerns are prompting companies to delay investment, while households put off discretionary purchases – such as technology gadgets.
Higher prices, stronger dollars
Higher rates have also helped the US dollar rise against other currencies, thus eroding the dollar he won Created in international markets by technology companies when they convert foreign currencies into dollars.
The tech sector’s landscape is, to put it mildly, bleak. This was confirmed by the third-quarter earnings season, which is drawing to a close. Microsoft (MSFT) – Get a Microsoft reportthe alphabet (The Google) – Get the Alphabet reportAmazon (AMZN) – Get an Amazon.com Inc. report.identification platforms (dead) – Get the Meta Platforms Inc. report. And the company has it all warned of economic uncertainty.
In response, investors are liquidating tech stocks. Shares of Meta Platforms, the parent company of Facebook, Instagram and WhatsApp, fell 36% in the fourth quarter. During the same period, Amazon shares fell by 23%, Alphabet by 15% and Microsoft by 11%.
This downward movement may continue as the sector just delivered another round of bad news in the form of massive job cuts and hiring freeze.
Amazon, the e-commerce giant founded by Jeff Bezos, said on November 2 that it will “pause on increased hires to our company’s workforce.”
“We expect to keep this pause in place for the next few months, and we will continue to monitor what we see in the economy and business in order to adjust what we believe makes sense,” said Beth Galletti, senior vice president of people and technology experience and Wrote In a message to employees.
She explained, “We are facing an extraordinary macroeconomic environment, and we want to balance our employment and investments with thinking about this economy. This is not the first time we have encountered uncertain and challenging economies in our past.”
Technical layoffs continue
The move is the latest wave of cost-cutting measures from the Seattle group in recent weeks. Amazon has already removed more than 10,000 job offers in its retail division and suspended several projects. The company shut down the Treasure Truck Program, a fleet of touring trucks that offer daily discounts on a range of items.
Just a day later, online payments giant Stripe said it would lay off 14% of its employees this week.
Patrick Collison, CEO of Stripe, said: Wrote for employees.
He continued, “The world is now transforming again. We are facing stubborn inflation, energy shocks, higher interest rates, lower investment budgets, and lower startup funding.” “We believe 2022 marks the beginning of a different economic climate.”
“The announced reduction in strength is a proactive step to ensure the company is prepared to accelerate implementation and achieve strong business results in the fourth quarter of 2022 and into 2023,” Lyft He said in an organizational file.
In a note to Chief Executive Officer Logan Green and President John Zimmer they said, “There are many challenges at play across the economy. We are facing a potential recession sometime next year and the costs of insurance for joint flights are rising.”
Microsoft has announced two rounds of job cuts this year, while Meta will reduce its workforce for the first time since it was founded in 2004.
As for Alphabet, the parent company of Google and Youtube It will slow down the pace of hiring sharply in the fourth quarter.
#Amazon #leads #tsunami #terrible #tech #news #Arena