It’s well known that the Big Tech companies that have dominated the internet have brought in billions of dollars over the years, allowing them to spend it on shocking salaries, beautiful offices, and smaller companies.
The past year of rising interest rates and falling stock prices have caused a rumble in the industry, along with the San Francisco Bay region that it rules. Currently, there are tens of thousands of layoffs from many top tech companies, including Google, Microsoft, Amazon, and Facebook. Does this mean that the Golden Age is officially over?
On Wednesday, Facebook parent company Meta called 2023 the “year of efficiency” and said it would remove layers of middle management in an effort to make decisions faster and become more productive, causing the stock to jump more than 23 percent Thursday morning.
“We closed last year with some difficult layoffs and restructuring some teams. And when we did this, I said clearly that this was the beginning of our focus on efficiency and not the end,” Meta CEO Mark Zuckerberg said. His comments came as the company posted its third straight quarterly revenue decline.
Apple, Google, and Amazon – among the biggest drivers of the West Coast economy – plan to announce their year-end numbers on Thursday afternoon.
“Big Tech earnings this week will fill in a major piece of the Wall Street puzzle,” said Dan Ives, an analyst with Wedbush Securities. He said he expects the companies to signal that more layoffs and cost-cutting could be coming, even as the markets for digital advertising and cloud storage – crucial for Big Tech – are beginning to stabilize.
The reports are shaping up to be some of the most important in months for Wall Street analysts and investors, who have been asking the firms to fire workers and cut costs and want to know tech CEOs’ predictions for the industry in 2023.
California labor laws require companies to give employees two months of warning before laying them off, meaning most people who lost their jobs are technically still employed, even though they’ve been locked out of their offices and equipment. One employee who lost his job after 13 years at Google said the company truly felt like it wasn’t a regular corporation but a place where the ultimate goal was to bring big world-changing projects to fruition.
But the layoffs have certainly curtailed that spirit, he said. The laid-off worker recently spoke to a colleague who is still employed but has lost much of his faith in the company. “He said, ‘the magic of Google died for me, and I don’t know how to stay motivated.’”
