The tech giants are facing a test of their resilience. Years of success have earned them praise from investors and criticism from regulators and smaller competitors. However, a new recession, stricter regulation in Europe, and new competitors and technologies are now challenging their dominance. The pandemic also prompted these companies to make heavy investments in personnel and new products based on the idea that virtual life would be permanent, which has not proven to be the case.
To cope with these challenges, tech companies are cutting expenses. Amazon announced layoffs that will affect 18,000 employees, Meta Platforms will cut 13% of its workforce, and Alphabet is reducing staff by 15% at its healthcare unit Verily. Tech employers have cut over 170,000 jobs in the past year.
Despite the challenges, some analysts remain optimistic. Dan Ives of Wedbush Securities believes that these companies will ultimately navigate their troubles and recover. He notes that they have gone from spending like “1980s rock stars” to being more financially cautious.
It remains uncertain how these tech giants will fare in the face of new competition and economic uncertainty, but their resilience will certainly be tested in the coming year.