Tech giants that have often weathered the economic turmoil may not be able to escape the current downturn, according to a report from the sector’s top companies.
Why is it important?Even as other industries struggled during the pandemic, technology thrived as much of the economy shifted online. Now they are gearing up to hit live.
- Google, Snap, Twitter and Facebook parent Meta have all warned in different ways about a bigger-than-expected slowdown in online advertising.
- PC chip giant Intel posted disappointing numbers on Thursday, though its problems were exacerbated by its own execution problems rather than a slowdown in PC sales.
- Amazon, which reported its results on Thursday, said sales growth was flat, with online sales down year-on-year.
Apple, on the other hand, has reached a somewhat better level As of the results posted yesterday.
- In April, the company, which anticipated component shortages and production issues, forecast a drop in quarterly revenue of $4 billion to $8 billion, showing a modest impact, while iPhone sales remained strong.
Yes, butEven Apple has taken some hits from the broader economic slowdown, including revenue from wearables and services.
- Apple said the company’s overall revenue will grow faster in the current quarter, but growth in its services business will continue to slow.
The big pictureTech companies are hitting the brakes, especially when it comes to hiring. A few months ago, their biggest challenge was finding enough qualified people to fill open jobs.
- While most large companies have stopped short of a full hiring freeze, nearly all said they expect headcount growth to slow.
- Even Apple plans to slow its hiring pace. CEO Tim Cook told analysts that Apple will continue to hire in key positions, but that we are being more intentional about doing so.
- Many startups, meanwhile, are weighing or implementing job cuts in anticipation of a funding drought.
between the linesCompanies face many challenges, from supply chain bottlenecks to inflation to foreign exchange costs.
Be smart: Just planning for an economic downturn can cause a recession to happen.
- As companies cut their own advertising budgets and try to do more with less, the rest of the economy feels the bite.
Our thought bubble: No one is happy in such a business situation, but the markets are relieved that most of the tech giants have avoided big negative surprises.
- Also, the downturn appears to be good for the big companies in the long run, as they can use their vast resources to invest in new products and growth while others struggle to survive.
- In general, these are good times to make purchases, although this is more tightly controlled for large technology companies.