The party is over for tech companies


The party te is over for technology companies

On a phone screen, the logos of Google, Apple, Facebook and Netflix

After two glorious years, the economic crisis has finally caught up with technology companies, especially social networks and large platforms which are facing the beginning of saturation.

Only Amazon and Apple reassured the market a little on Thursday with better-than-expected sales, thanks in particular to the success of their star products.

The e-commerce giant made more than $121 billion in revenue in the second quarter, up 7%.

Its stock jumped more than 10% in electronic trading after the market closed.

Despite inflation driving up the price of fuel, energy and transportation, we are making progress on more controllable costs, Andy Jassy said , the boss of Amazon, quoted in a press release on Thursday.

AWS, its cloud computing service, a world leader in remote computing, earned $19.55 billion in revenue (+33% year-on-year), but its online sales fell 4%, to 50, 9 billion.

In addition, its operating profit – a key indicator of profitability – came out at 3.3 billion dollars, less than half compared to last year.

It hasn't been a golden quarter at all, reacted Andrew Lipsman, analyst at Insider Intelligence. E-commerce business is struggling to return to positive growth, and AWS and advertising are slowing.

Apple reported revenue on Thursday quarterly better than expected (83 billion, up 2%), thanks to continued strong demand for the iPhone.

Sales of Mac computers, iPad tablets and connected objects, on the other hand, fell.

The apple brand had specified in April that the closings of factories in China because of the COVID-19 and the shortage of silicon necessary for the manufacture of the chips were to deprive it of 4 to 8 billion dollars of sales turnover. #x27;business.

But these logistical disruptions were less significant than expected, assured the boss of the group, Tim Cook, during a conference call.

For the current quarter, Amazon and Apple expect stronger sales, despite the negative impact of currency effects.

Intel had a harder time weathering the turmoil.

The American semiconductor giant saw its turnover fall by 22%, to 15.3 billion dollars, and significantly revised its annual forecasts at the decrease.

At issue, according to the boss, Pat Gelsinger, the sudden and rapid decline in economic activity. He also mentioned execution issues on a conference call, including product design.

In a few months, the economic environment of the technology giants has deteriorated radically.

The health crisis and lockdowns have led to an explosion of online habits, from consumption to work and entertainment.

Today, the digital transition continues – most platforms are gaining new users – but at a slower pace, comparable to that before the COVID-19 pandemic.

Added to this phenomenon are numerous macroeconomic constraints, starting with inflation. Google, Meta (Facebook, Instagram), Snap and Twitter, which depend on advertising, are therefore suffering from cuts in advertisers' marketing budgets.

Amazon and Apple are coping with somewhat reduced demand for certain products and supply chain challenges.

The Seattle group, the second largest employer in the United States behind Walmart, doubled its workforce from 2019 to 2021. It now has 1.52 million people, about 100,000 fewer only at the end of the first trimester.

Other tech companies have moved to slow the pace of hiring, like Google, Microsoft, and Snap. The e-commerce platform Shopify has laid off a thousand people, or 10% of the staff. Netflix, which lost nearly a million subscribers between the end of March and the end of June, laid off more than 400 employees during the same period.

We're going to have to do more with less, Meta boss Mark Zuckerberg said Wednesday after the social media giant saw its quarterly revenue decrease for the first time in its history.

Meta is losing its grip on its huge audience, Insider intelligence analyst Debra Aho Williamson pointed out.

Social platforms are trying to stay ahead of the fierce competition from the popular TikTok app among teens and young adults.

Google posted the slowest year-on-year revenue growth rate since the second quarter of 2020, when advertisers abruptly closed the floodgates at the start of the pandemic.


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