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 technology sector at least have some growth where the rest of the world has stalled. People interact only through the products and services of technology companies.
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 as the world’s central banks battle it out inflationthe highest level in 40 years.
Many economists and business leaders say this Monetary policy It is likely to cause a so-called hard landing in the economy, a Recession. These concerns are driving companies to delay investing, while households are postponing discretionary purchases — such as technology gadgets.
Higher prices, stronger dollars
The higher rates also helped the US dollar to rise against other currencies, which in turn erodes the dollar he won They are created in the international markets by technology companies when they convert foreign currencies into dollars.
The tech sector landscape is, to put it mildly, bleak. This is 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 the Amazon.com Inc. report.identification platforms (dead) – Get the Meta Platforms Inc. report. The company has it all warned of economic uncertainty.
In response, investors are liquidating technology stocks. Shares of Meta Platforms, the parent company of Facebook, Instagram and WhatsApp, fell 36% in the fourth quarter. Over the same period, Amazon shares fell by 23%, Alphabet by 15% and Microsoft by 11%.
This downward move may continue as the sector has just delivered another round of bad news in the form of massive job cuts and a hiring freeze.
Amazon, the e-commerce giant founded by Jeff Bezos, said on November 2 that it would “pause on increasing hiring in 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 to what we think makes sense,” said Beth Galletti, senior vice president of People Experience, Technology and Wrote In a message to the staff.
She explained, “We are facing an extraordinary macroeconomic environment, and we want to balance our employment and investments with reflection on 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 put many projects on hold. The company has closed the Treasure Truck program, a fleet of touring trucks offering 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.
said Patrick Collison, CEO of Stripe Wrote for employees.
He continued, “Now the world is turning again. We’re facing stubborn inflation, energy shocks, higher interest rates, lower investment budgets and less start-up funding.” “We believe that 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 execution and deliver strong business results in the fourth quarter of 2022 and into 2023,” Lyft said. He said in an organizational file.
In a memo to Chief Staff Officer Logan Green and President John Zimmer they said: “There are many challenges playing out across the economy. We are facing a potential recession sometime next year and costs for shared travel insurance are rising.”
Microsoft has announced two rounds of job cuts this year, while Meta will cut its workforce for the first time since its founding in 2004.
As for Alphabet, the parent company of Google and Youtube It will slow the pace of hiring sharply in the fourth quarter.
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