2022s Big Tech’s $4.5 Trillion Massacre

Massive Cuts

Typically, tech, a growing industry, recruits and attracts people. However, by 2022, technology had shed massive amounts of talent. Massive cuts in perks, jobs, and outlays have become the norm in Silicon Valley and other tech hotspots.

Meta, formerly known as Facebook, has laid off employees for the first time since its inception in 2004. In early November, more than 11,000 people, or 13% of the company's workforce, were let go.

In a blog post at the time, Zuckerberg explained to the staff that the macroeconomic slump, increasing competition, and ad signal loss had resulted in significantly lower income than he had anticipated. He accepts responsibility for his getting this incorrectly. In his words, they (he and his firm) need to become more capital efficient in this new environment.

The billionaire also stated that he and his staff reduced expenditures throughout their organization, including decreasing budget and perks and shrinking the real estate footprint. Additionally they are rearranging teams in order to boost their efficiency.

Amazon, the e-commerce and cloud computing behemoth, also reduced its employees. It had hired aggressively during the epidemic as global business migrated online because of societal limitations aimed at preventing the spread of covid-19. The group's cash cow, the AWS cloud segment, has not been spared by the new austerity philosophy.

Amazon, the e-commerce and cloud computing behemoth, also reduced its employees. It had hired aggressively during the epidemic as global business migrated online because of societal limitations aimed at preventing the spread of covid-19. The group's cash cow, the AWS cloud segment, has not been spared by the new austerity philosophy.

Hard 2022

"Unfortunately, I was impacted by today's layoff with 10,000 other Amazonians. It is super hard for all of us, and I am still trying to navigate through this while constrained by the timeline of being on a #visa," Shivani Parate posted on LinkedIn in mid-November. She worked as a software development engineer at Amazon.

Apple, Microsoft, Alphabet, Lyft, Shopify, Stripe, Coinbase, Gemini, and Tesla: The anxiety of losing a job has returned.

For many years, that sensation had vanished as daily life became increasingly dependent on technology.

However, the reopening of the economy, Russia's conflict in Ukraine, Europe's energy crisis, and inflation, which is at its highest level in more than 40 years, have changed the scene.

Central banks worldwide have discovered a single solution to the relentless rise in the cost of goods and services: aggressive interest rate hikes.

For example, interest rates in the United States have not been this high since 2008. During the pandemic, the Federal Reserve raised the benchmark rate from ground zero to 4.25% to 4.5%.

As a result, higher interest rates limit growing companies' ability to invest in existing and future projects.

Stock Market Disaster

In an apparent attempt to explain Tesla's stock market disaster, Musk recently stated that macroeconomic conditions are difficult: energy in Europe, real estate in China, and insane Fed rates in the United States.

Overall, the stock market has suffered a similar decline: Apple, Microsoft, Alphabet, Amazon, Tesla, and Meta, six of the world's ten largest businesses by market capitalization, have lost more than $4.5 trillion in value this year.

In detail, Tesla's market value is down nearly $800 billion, and Amazon's market value is down nearly $900 billion. Apple's market value is down nearly $760 billion, Alphabet's market value is down $748 billion, Microsoft's market value is down $740 billion, and Meta's market value is down nearly $600 billion.

As a result, Tesla and Meta were removed from the top ten list of the world's largest corporations. Amazon has exited the trillion-dollar club.

What 2023 Had Planned for Us? It's Difficult to Predict.

Consumers prefer to spend more on IT products and services when things are going well. However, when the economy deteriorates, people become more cautious, prioritizing vital purchases, frequently at the detriment of technology.

Many economists and business leaders predict a recession in 2023, making it difficult to forecast technology's future.

This might have a negative impact on consumer spending. However, investors frequently opt to reward firms that dramatically reduce expenses. Meta's shares have risen nearly 16% since it announced employment layoffs on November 9. So let’s see what we will have next.