Layoffs have come to the normally reliable technology industry, and third-quarter reports are expected to highlight how bad the state of the job market has become in recent months.
Although job openings remain vast, the expected recession has led the world’s largest companies to take cost-cutting measures to weather the storm.
For instance, Snapchat’s parent company Snap laid off 20% of its staff last August after sharing an ominous message about the depleting economy.
In the coming weeks, Alphabet, Apple, Amazon, Meta, Microsoft and Twitter are expected to reveal their earnings report, which is expected to offer a better look into how external factors have impacted business.
“People probably should be bracing themselves for these results,” said Scott Kessler, technology global sector lead at Third Bridge Group.
Big Tech seemed impenetrable for years, with earnings and stock remaining consistent through a variety of global events. However, economic forecasts appear grim for nearly all industries.
Inflation has decreased affordability among consumers, leading them to spend less while businesses struggle to address supply chain issues.
“We compare investor negative sentiment on tech today to what we have seen only 2 other times in our decades of covering tech stocks: 2008 and 2001,” said Dan Ives, an analyst at Wedbush.
Each of these companies has taken a variety of approaches in order to prepare for the economic downturn. Some have turned to layoffs, while others have dialed back on other business endeavors.