(Photo by Keming Tan on Unsplash)
By John Hugh DeMastri
Daily Caller News Foundation
It was a difficult year for Big Tech, with the “Big Five” of Amazon, Apple, Google-parent Alphabet, Facebook-parent Meta and Microsoft each ending the year with stock prices down at least 25% amid declining ad revenue, industry-wide layoffs and reduced demand.
Apple and Microsoft posted yearly stock declines of roughly 28%, beating the tech-focused Nasdaq Composite stock index which fell roughly 33% on the year, according to Google Finance. Alphabet’s Class A stock and Amazon, on the other hand, lost against the market — with 40% and 50% declines respectively — as tech stocks plummeted industry wide and companies lost over $4 trillion, according to CNN.
Meta’s stock was hit the hardest, down nearly 65% on the year, as the company was forced to cut 11,000 staff from a workforce that had nearly doubled since March 2020 to roughly 87,000 employees after new privacy rules on Apple’s app store cut into ad revenue. Meta’s Instagram is also facing intense competition from TikTok and investors are losing confidence that the billions that CEO Mark Zuckerberg is investing into virtual reality is worth the expense.
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Amazon publicly announced a hiring freeze on Nov. 3, citing “uncertain and challenging” macroeconomic conditions and noting that employees would still be replaced if they left and some targeted groups would see incremental hiring. In September, the company abandoned more than 40 warehouses — nearly 25 million square feet of real estate — after a pandemic-driven boom in e-commerce demand began to wane, according to CNBC.
Alphabet struggled to convert on several bets this year, with its premium Pixelbook laptop being discontinued and cloud gaming service, Stadia, slated to be taken offline in January, according to Vox. Although the company has so far cut costs without cutting workers, after revenue declined annually due to weakened ad returns, Google employees are growing increasingly concerned that layoffs are around the corner, according to The New York Times.
An outbreak of COVID-19 — and protests against the extremely restrictive lockdown rules implemented by the Chinese government — at a Zhengzhou, China, iPhone factory slowed Apple’s production of one of its flagship products heading into the holidays, CNBC reported. Even if production shortages continue, Apple consumers’ attachment to the company’s software and hardware ecosystem might help the tech giant continue to stay relatively ahead of other Big Tech firms, senior analyst Angelo Zino of CFRA Research told CNBC.
Microsoft has managed to stay ahead of the tech sector for similar reasons, and it remains predictable in the eyes of investors compared to competitors, Zino told CNBC. Microsoft’s $69 billion bid to acquire video gaming titan Activision-Blizzard has been challenged by the Federal Trade Commission, but if the company is successful, it would make Microsoft the world’s third-largest video game company, Business Insider reported.
Microsoft, which employs roughly 180,000 workers, cut roughly 1,000 jobs in October and less than 2,000 employees in July, CNBC reported.
With investors increasingly fearing a recession, and the Federal Reserve unlikely to cut interest rates in the near future, the tech recovery many investors are hoping for next year may not materialize, CNN reported.
Meta, Alphabet, Apple and Microsoft did not respond to a Daily Caller News Foundation request for comment. Amazon declined to comment on its stock performance.
This story originally was published by the Daily Caller News Foundation.
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