Reference News Network reported on October 30th, according to the US " Wall Street Journal " website on October 28th, many companies from Amazon to the metaverse are adapting to the turbulent era, and the technological prosperity is about to end.
The earnings of large tech companies over the past week have hit investors hard. Here, people are worried that the recession and the strong dollar will have a serious impact on companies that were originally considered more resilient.
These industry giants warn that there will be more pain in the future.
Intel CEO Pat Gersinger said: "There is no reason to think that there will be any good news soon." Intel has lowered its annual sales prospects. He said on the 27th that the US inflation problem, high energy costs and the conflict between Russia and Ukraine have caused a shock to the European economy. In addition, the chaos in Asia means that "we still have to suffer economic headwinds as we move into the next year."
Tech companies with strong growth in the early stages of the pandemic now feel that new situations such as high inflation, continuous rate hikes, headwinds in the currency sector and other issues have had an impact on the company's earnings statements. Earlier this year, there was a slowdown in areas such as PC sales and digital advertising, which appears to be spreading towards areas such as cloud computing , which were originally thought to be able to withstand economic weakness.
Google physical retail stores in Chelsea, Manhattan, New York (Reuters )
The result is that industry leaders including Apple , Amazon , Microsoft , Facebook parent company Metaverse Platform Company and Google's parent company "Alphabet" Company are currently increasing cost control and adjusting employee size. This sounds more like the practice of an old-fashioned blue chip company, rather than the actions of lofty technology giants.
In addition, the industrial sector also showed obvious signs of feeling the impact of the economic slowdown in the third quarter of this year. "We have seen that weakness is beginning to expand in the industrial market," said Dave Parr, director of investment PR at a chip maker Texas Instruments, on an analyst call on the 25th. "We have seen that weakness is beginning to expand in the industrial market."
These problems are causing the already difficult situation of technology companies to worsen due to the decline in demand for personal computers and other personal electronic products. According to Goldner Consulting Company , global personal computer shipments fell by nearly 20% year-on-year in the third quarter of this year, the largest decline in more than 20 years.
In the entire technology industry, companies are currently taking active measures to cut costs and prepare employees for difficult times ahead.
According to people familiar with the matter, Google CEO Sundar Pichai said at a full employee meeting on the 27th that the company has developed too fast in the past and now it needs to deal with corporate spending issues more responsibly. "We are working very hard to ensure that the company's current profitability is not the new normal," said Brian Olsavsky, chief financial officer of Amazon, after the company announced its quarterly results.
Amazon has subleased millions of square feet (100 square feet is about 9.3 square meters) of warehouse space and has some of its teams stopped hiring. In a telephone interview with reporters, Olsavski said: "We will be very cautious about recruitment. There is no doubt that we are studying the company's cost structure and looking for areas that can save money."
Intel said on the 27th that the company plans to cut costs by $3 billion in 2023, saving an average of $8 billion to $10 billion annually from 2025. Gersinger said the company has begun layoffs and is considering divesting some of its business to deal with the current economic situation. Mark Zuckerberg, the social media giant, currently with more than 87,000 employees, may reduce its workforce next year. The company also said it is dealing with office space rationally.
tech executives have said they are keenly aware that the ongoing price rise and economic turmoil are putting pressure on the financial situation of consumers and businesses.
Microsoft CEO Satya Nadella in an earnings call to promote the company's Edge browser , saying that the browser can save money for consumers. He said people are currently using the browser's coupon and price comparison feature to save money.
For some tech giants, what makes the situation worse is that the digital advertising market has experienced serious chaos in the past year. Apple's adjustments to ad tracking capabilities last year and spending cuts driven by the recession have put serious pressure on companies focusing on digital advertising.
"Alphabet" company released a report this week saying that YouTube advertising sales fell year-on-year for the first time. The revenue of the Metaverse Platform Company has dropped two consecutive times, and the large-scale selling of stocks has caused the company's market value to drop to its 2016 level.
Source: Reference Message Network
