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After a turbulent year of job cuts and falling revenues, can US tech giants get back on their feet?

Many big tech firms, which flourished during the COVID-19 pandemic due to low interest rates, are now reigning in their spending amid a weak economy.

After a turbulent year of job cuts and falling revenues, can US tech giants get back on their feet?
Tech firms such as Microsoft, Google, Salesforce and Meta have cut jobs over the past year. (Clockwise from top left: Reuters/Lucy Nicholson; AP Photo/Jeff Chiu; Reuters/Brendan McDermid; Reuters/Benoit Tessier)

NEW YORK: Tech giants in the United States are exploring opportunities to spur investor confidence and prove they are back on track, after a turbulent period which has seen companies including Alphabet, Amazon, Meta and Microsoft lay off staff. 

Many big tech firms, which flourished during the COVID-19 pandemic due to low interest rates, have been reigning in their spending amid a sluggish economy. 

Now, investors are watching to see if their plans to slim down operations will regain the confidence of the markets.


At the New York Stock Exchange, there is optimism that such efforts are working.

Observers said big tech shares might be able to claw back at least some of the trillions of dollars of value lost last year. 

This comes following thousands of layoffs at tech giants over the past year, after a pandemic-led hiring boom left them flabby in a sluggish economy.

Meta, which owns Facebook and Instagram, culled more than 11,000 jobs last November to boost efficiency, amid a crumbling advertising market and decades-high inflation.

The tech firm expects this year’s expenses to be less than previously forecast, which has prompted a jump in its share price.

Meanwhile, Google’s parent firm Alphabet said last month that it is cutting about 12,000 jobs.

Some Google staff found out that their employment was terminated when they could not log into their corporate accounts, said Mr Christopher Fong, founder of, a group that helps former Google employees hoping to start their own firms. 

“They weren’t sure exactly what was happening. Some of them checked their personal accounts and realised their employment was terminated. That was probably the biggest shocking news to them.”

During the COVID-19 pandemic, some of the tech sector’s biggest players boomed, doubling their workforces in just a few years.  

“Fuelling that growth was the fact that interest rates were so low in the United States,” said Dr Arun Sundararajan, professor of technology, operations and statistics at New York University. 

“So it wasn’t just the big tech companies. There were a whole host of start-ups, smaller companies growing big very fast, because they were able to raise a lot more capital than they otherwise would have. And they went on hiring sprees as well, furthering fuelling this hiring boom.”


But as the world opened up, demand fell back down. Soaring inflation and high interest rates have since fuelled economic uncertainty and recession fears.

For now, tech companies are looking at ways to get back on track. 

Market watchers believe artificial intelligence and machine learning are the next drivers of the tech industry.

“You can’t go a day without coming across some important new development, news article, commentary about this area. And it’s because people see it as the next wave and potentially changing the world,” said Mr Scott Kessler, global sector lead for technology, media and telecommunications at investment research firm Third Bridge.

“And so that’s really what technology has to offer, and that’s really why counting it out at this point could very well be premature. Because we’ve seen time and time again, at least over the course of my career, that doing that is only something people do at their own peril.”

Source: CNA/ca(dn)


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