So
many IT businesses have announced layoffs in recent months. This week, Amazon
and Salesforce both announced employee reductions. Amazon's cuts will affect 18000
individuals, largely in its corporate ranks. Meta, the parent company of
Facebook, has also disclosed cuts. This is a significant reversal for a sector
that was hiring quickly during the pandemic. To be fair, many of the laid-off
employees are quickly finding new jobs, and overall unemployment in the United
States is still low, but the cuts taken collectively could indicate a change in
the economy.
How
tech corporations prioritize with us in the future is It's almost like a lot of
the tech companies had carte blanche when it came to hiring all right but now
there are all these layoffs that are happening.
What are some of the circumstances that resulted in this change during the past several months?
Tech
CEOs have become much more cautious as there has been talking of a potential
recession on the horizon, talk of closing the hatches and you know their
clients are starting to slow their spending and they are in Tech but also other
Industries and they are trying to show up their balance sheets so they are
seeing some cautiousness from their own clients maybe pulling back spending and
they are also having to answer to their investors in a different way. What are
the CEOs and top executives at companies saying about having to make these cuts
and are they taking any responsibility for each company individually?
These CEOs are talking more about profits and they're under pressure from either their venture capitalists who are backing them or, if they're public, from public investors who want to see free cash flow and good balance sheets. There is a CEO like that. Mia culpa, or "I'm sorry, we grew too rapidly and did too much, we have to sort of right size our company," are becoming increasingly common when it comes to major IT companies. Does this also have an impact on newly established small businesses?
It's affecting both public companies and start-ups, and on the start-up side, I believe the VCS are beginning to grow concerned about company costs being out of whack and they really want their portfolio companies to shore up their finances and focus more on profitability than growth. We have a quote from Excel, a well-known venture capitalist, who claims that the bull market in 2022 was due to the humility that these CEOs that the market would be bullish in 2022.
According to the company's CEO, Glenn Coleman, he has some regrets about how this transpired, but they added all these Realtors and entered various business sectors during covid19, and I believe the biggest lesson he learned was that the easiest way to build a successful company isn't to think of novel ways to delight customers, he says. Rather, he says, it's to stop doing stupid things. I think it might be a little too soon to tell, but we did see you know I wouldn't be surprised if we saw a few quarters of austerity where these companies that are you know sort of synonymous with perks and lavishness and big pay packages start looking a little bit more like traditional public companies that are publicly traded. Don't make it so that I wouldn't be surprised in the coming months or a year those you know aren't as prioritized as they would have been in the past what this will mean then for the tech sector going forward you know it's tough to say
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