More Job Cuts From Big Tech Braces

Revenue estimates for the Big Five IT giants—Meta, Amazon, Apple Inc., Alphabet Inc., and Microsoft Corp.—have been reduced by 5% from October to January, from $561.4 billion to $526.4 billion.

It is anticipated that large American technology companies will reduce their bloated workforces and costs over the course of the next few quarters, reversing the excesses that were prevalent during the pandemic era. These companies are eager to shore up revenues and profits and placate investor concerns during a time of slowdown sales growth.

Big Tech Braces

Big Tech Braces | Readohunt
Big Tech Braces | Readohunt

However, as they readjust to a high-interest environment, all five of America’s major technology businesses are projected to record a decline in profits for the period of October-December. Some of the biggest losses will likely come from and Facebook owner Big Meta Platforms.

As of January, analysts’ overall revenue projections for the 5 companies — Meta, Amazon, Apple Inc., Alphabet Inc., and Microsoft Corp. — were reduced by 5%, coming in at $561.4 billion. This was a reduction from the previous prediction of $582.4 billion in October.

According to the statistics provided by FactSet, large technology businesses are anticipated to be one of the largest drags on the eleven sectors that make up the S&P 500. Specifically, the information and technology sector are anticipated to record a fall in earnings of 9.5%.

For at least the next three quarters, I do not anticipate any positive developments. Siddharth Singhai, chief investments officer of investment firm Ironhold Capital, stated, “I would predict additional layoffs.”

Employees began receiving word on Wednesday if they would be laid off as result of Amazon’s decision to lay off 18,000 employees, which comes as the company prepares to post earnings down 38% and sales rising at the modest pace including over 22 years.

The store had overstaffed in anticipation of a pandemic, mirroring Meta’s aggressive recruiting in response to an increase in use of social media by housebound clientele. The November decision to eliminate 11,000 positions at Meta may result in a 42% drop in profit, the company’s seventh consecutive quarterly fall. The company’s revenue is expected to drop by 7%, which would be a record low.

In 2020, the average of the five firms hired 45% more peop

American technology companies | Readohunt
American technology companies | Readohunt

le, and in 2021, they hired 20.5% more people, with Apple being the most frugal employer. Because many internet firms “spent money like 1980s rockstars,” says Wedbush analyst Dan Ives, “we are anticipating another 5% to 10% staff decrease throughout the tech industry.” On Wednesday, Microsoft announced it will be eliminating 10,000 positions, which would affect fewer than 5% of the company’s workforce. Revenue is expected to increase by 2.4%, which would be the weakest growth rate in almost 24 quarters. Revenue is predicted to drop by 9%.

As a result of worker dissatisfaction connected to COVID limitations at the largest iPhone manufacturing in China, Apple’s major supplier Foxconn saw significant disruption in production. This would be the first quarterly revenue decline for Apple in 15 years.

It is anticipated that the rate of revenue and profit at Alphabet, that is cutting back on recruiting and making “course corrections” to reduce expenses, would be the slowest it has been in ten quarters. Analysts have suggested that these corporations could divert funds into share repurchases this year in order to prop up their stock prices. Comparatively, the overall market had a fall of about 20% during the same time period, while their stock prices fell with between 26% more than 60%.

They have approximately $110 billion in cash and equivalents between them, with Amazon owning the greatest amount and Meta owning the least as of the end of the July – September period.

Leave a Reply

Your email address will not be published. Required fields are marked *