Kozminski Techblog

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Let’s start with the fact that against the backdrop of the global crisis and the incredible growth of inflation and the slowdown in economic growth at the global level. Big Tech companies published reports for the 3rd quarter of 2022, which clearly showed that the period of rapid growth, during the coronavirus, has come to an end and now it is very hard times, everyone understands this. Against this backdrop, the stock market opened in the morning with rather sharp losses from technology companies, but the blow came even more strongly after the disappointing Amazon report.

“The stock market losses accelerated late on Thursday after Amazon shocked Wall Street with a weak revenue forecast for its all-important fourth quarter of the year, when holiday shopping normally buoys its revenues. The US ecommerce company indicated revenue in the period was likely to be as much as $15bn below the $155bn analysts had been predicting.”Financial Times

Well, given the fact that the stock market is very sensitive to such reports and reacted instantly, leading to the fact that large Big Tech companies lost a lot in value, namely more than 800 billion dollars only for one week. However, if you look even more globally at the picture, the companies lost only more than 3 trillion dollars for year, which is very scary.

Just yesterday,Amazon was reported as the world’s first company to lose more than 1 trillion in market value in a year.
Meta, against the backdrop of failed attempts to create Metaverse and increased competition from Tik-Tok, has already lost more than 700 billion of its value.
Even major tech giants such as Microsoft and Google lost over 34% of their value.

If we look at the whole picture that is happening on the world market, then such huge losses do not just pass without consequences and painlessly.As in any crisis, as we know first of all companies, when the dark times begin to come, companies cut costs drastically. Namely, first of all, they hit employees, mass layoffs did not have to wait for a month, as one after another Big tech companies began a wave of layoffs.

So only Meta laid off 11 thousand employees, namely 13%, which is one of the largest reductions in tech companies, and also stopped recruiting new workers. Following Meta, Amazon also began to optimize and reduce costs, as well as a wave of layoffs and also stop recruit new workers
“Amazon is conducting a review of its loss making business units as part of a sweeping effort to cut costs at the ecommerce and cloud group, two people familiar with its plans confirmed.” Financial Times. Google and Microsoft are also conducting cost optimization and a wave of layoffs , but in much smaller quantities than their counterpart.

However, the biggest wave of layoffs and cost-cutting has come from Elon Musk, who laid off more than 50% of employees and recently announced the possibility of Twitter going bankrupt.This is very scary where Elon Musk’s Twitter is leading after the acquisition, because even in his main company Tesla, things are not going super smoothly, so against the backdrop of the global crisis of companies, it lost more than 674 billion $ in 1 year.

In general, summing up, we can say that the crisis has a rather strong effect on the market and it is not known what awaits in the future, but I did not want the world to be dragged into the abyss of the economic crisis of 2008 and 1930s.

So leave your comments what do you think big tech companies will be able to recover their lost market value and how long will it take them?

Sources:

1.https://www.ft.com/content/3abf8c31-95bb-47ea-a461-351a5fbfaa4d

2.https://www.cnbc.com/2022/10/27/the-biggest-tech-stocks-have-lost-3-trillion-in-market-cap-the-last-one-year.html

3.https://www.bloomberg.com/news/articles/2022-11-09/amazon-hits-unwelcome-milestone-with-1-trillion-in-value-lost?leadSource=uverify%20wall

4.https://www.cbsnews.com/news/meta-stock-down-earnings-700-billion-in-lost-value/

5.https://eu.usatoday.com/story/money/2022/11/08/amazon-apple-microsoft-market-cap-down/8295415001/

6.https://www.ft.com/content/348068b1-24d9-434b-9ae7-6599027bf84f

7.https://www.ft.com/content/b6e8e01c-cc48-43cc-9405-2fc67ff20817

8.https://tech.co/news/microsoft-fires-1000-workers

9.https://www.euronews.com/next/2022/11/04/twitter-temporarily-closes-offices-as-elon-musk-begins-mass-layoffs

10.https://www.dw.com/en/twitter-musk-warns-of-bankruptcy-as-executives-quit/a-63720402

11.https://www.bloomberg.com/news/articles/2022-11-09/tesla-market-value-halves-in-a-year-rocked-by-musk-stake-sales?leadSource=uverify%20wall