The slowing economy is hitting the tech industry hard. Giants like Microsoft and Alphabet are seeing a drop in revenue growth and some of the weakest quarterly earnings in years. As interest rates continue to spike, many businesses fear a global recession is right around the corner. Even the demand for Microsoft technology has waned in the last few months.
Alphabet, the parent company of Google and YouTube, has seen a significant drop in revenue. The same goes for Microsoft, but they have also been forced to layoff several workers.
Even the Xbox business is moving slow.
Some other tech companies like Netflix and Twitter are also feeling the pinch. Netflix is also pumping the brakes on hiring due to the economy.
“Anytime Google has missteps, it’s time to sit up and take notice,” Said Insider Intelligence analyst Evelyn Mitchell. In the past, Google seemed resilient to economic downturns.
“It’s very sad to see Google struggling, because it signals sharp times ahead if the market continues to move downward.”
Microsoft CEO Satya Nadella says the company is doing what it can to adjust to the negativity. “We need to stay focused and remember we have a goal.”
While the Covid-19 pandemic wreaked havoc on certain industries, tech saw a significant increase in sales. Employees who opted to work from home were in need of laptops, printers, and other gadgets. In today’s climate, the opposite is taking place.
“It’s very unfortunate,” said Nadella. “The issue is having an effect on tech selling abroad.”
Nadella says the company is having no illusions about the supply and demand. As long as there is a cut back on demand, the company will continue to lose money.
Alphabet and Microsoft were the recipient of more bad news on Tuesday as both companies saw a drop in after hours stock prices.
Dil Bole Oberoi
