Layoffs, stock market fall… The tech giants in trouble?

Amazon, Meta, Google, Microsoft… The list of tech companies looking to reduce their costs is growing day by day.

A brutal landing after the beautification of 2020 – 2021

After having recruited heavily during the pandemic (+800,000 jobs at Amazon between 2020 and 2021, +37,000 at Microsoft, and +27,000 at Meta…), Gafam et al. landed abruptly. The improvement that had boosted the consumption of their services seems to mark the step. With the end of teleworking and a degraded economic environment, these companies – less and less atypical – rarely confront realities and adopt cost-reduction policies.

For the past few months, the announcements of massive redundancy plans have been falling one after the other. -18,000 positions at Amazon, most of them in the connected objects business, -11,000 at Meta, or about 13% of its workforce, -8,000 at Salesforce, -7,500 at Twitter after the smashing takeover of the platform by Elon Musk, -4,000 at Booking, -1,200 at Snapchat, -1,000 at Microsoft… Usually known for its dizzying annual growth, the tech sector has made 154,000 layoffs in 2022, according to the specialized website Layoffs.lfy. 80% of these job losses concern the United States.

In France, layoffs remain rare in the sector. But some companies do not seem to be spared. Back Market, the French unicorn of reconditioned, has thus announced the dismissal of 93 employees, 67 of whom are in France.

Towards a maturity of the sector?

Inflation and the loss of purchasing power are pushing households to give up certain services, in particular subscriptions. But could the evil that is hitting tech be deeper? Could the sector be facing both a crisis of confidence and its maturity? The trees don’t go up to the sky, they say.

Financially, investors are becoming more reserved. The fundraising of the sector is becoming more difficult to complete. On the stock market, the values of the giants literally unscrewed in 2022.

Meta, ex-Facebook, has fallen by 62% in a year, led by its metaverse project which is swallowing up billions without concrete prospects for sales opportunities as well as by the loss of advertising revenues related to Apple’s new policy on iPhones.

These setbacks are probably not the only reasons for the rout, since the other giants have also been hit hard. Amazon lost 49%, Alphabet, Google’s parent company, is down -37%, and Microsoft and Apple have fallen by 27 and 28%.

However, is this the beginning of a new era for Gafam? Nothing is less certain. Because in this particularly gloomy context, Microsoft, Google, and Apple managed to generate more than $ 50 billion in profits in the third quarter of 2022. All the same.