This is the week of reckoning with technology.
Silicon Valley’s golden age is coming to an end, experts agreed. No more skyrocketing salaries, fancy offices and lavish perks for employees, who are now being shown the exit door.
Mark Zuckerberg, executive director of Meta (Facebook, Whatsapp or Instagram parent company) described 2023 as “the year of efficiency” in a conference held this Thursday with investors. He repeated the word “efficiency” at least 30 times and he did it to underline that the platform will spend less, remove layers of management, and kill dead-end projects.
Despite the fact that they continue to accumulate tons of money, the data at the end of 2022 indicated that the technological giants, which seemed untouchable and more so with the boom of the pandemic, stumbled last year. There was a drop in sales and a loss of faith on the part of those who had blindly trusted them with their capital until now.
According to analysts, 2022 was the worst year these tech companies have experienced on Wall Street since the 2008 financial crisis. Apple, Amazon, Alphabet (Google’s parent company), Microsoft and Meta collectively lost $3.9 billion in value of market.
The most eloquent data came with Apple’s results in the fourth quarter of last year. The Cupertino empire reported that its sales fell for the first time in a quarter in almost four years and that it was the biggest drop in revenue since 2019.
Sales in that period from October to December, in such a significant holiday stretch, were 5% lower than the same period of the previous year, something that had not occurred since 2019.
There will be those who conclude that the company that has not applied a massive staff cut is the one that comes out worst in the photo. But that doesn’t seem to be the issue. The company with the bitten apple had a much more restrained attitude than the others when it came to hiring during the pandemic boom.
Tim Cook, its executive director, has already warned that the company “will be thoughtful and deliberate” in its decisions.
Alphabet and Amazon are still growing, but at a much slower rate.
“We are committed to investing responsibly and with great discipline,” said Sundar Pichai, Alphabet’s chief executive. While Andy Jassy, ??in his first call with analysts since he replaced Jeff Bezos as CEO, highlighted how hard Amazon had worked to rein in what seemed like runaway spending.
