WWill 2024 be boom or bust for big tech companies?
estimate
the industry has seen more than 7,500 layoffs since the start of the year, a spate of pink slips that many had hoped would stop after deep job cuts in 2023.
But as earnings season for major U.S. tech companies begins this week, some analysts are predicting strong numbers. This set of quarterly financial results may indicate that the industry has shed pandemic-era hiring overhangs and reorganized around cloud computing and AI, with cuts in sectors where the outlook is less positive. It has become necessary. Analysts passionate about AI say we are at the beginning of a tech bull market.
Since the beginning of this year, Google has laid off more than 1,000 employees in various departments. The job cuts are small compared to January last year, but Google CEO Sundar Pichai warned that more layoffs are coming. He told employees in an internal memo last week that Alphabet was “removing layers to simplify execution and increase speed in some areas.”
“We have ambitious goals and will invest in big priorities this year,” Pichai said in the memo.
Obtained from Verge.
“The reality is that we have to make difficult choices to create the capacity for this investment.” However, the reductions “are not the size of last year's cuts and will not impact every team.” he added.
Alphabet workers union
called dismissal “needless” in Wednesday's post on X (formerly Twitter).
Amazon also announced new layoffs affecting hundreds of employees in its Prime Video and Amazon MGM Studios divisions. This is part of a move away from excessive spending on entertainment and a refocus on core priorities such as online shopping logistics and new businesses such as AI.
At Meta, where more than 20,000 layoffs were made last year, departmental cuts appear to have slowed, but have not stopped. Instagram eliminated its management layer in mid-January, cutting 60 technical program managers. Last year, the company announced it was adding employees to support “priority areas” and changing its workforce to include more “high-cost technical roles.”
And that may be the true story of the technology industry in 2024. If Wedbush analyst Dan Ives is right, the layoffs are almost complete and earnings season will be a time for a “popcorn break.”
“Not only will there be companies that will benefit from the AI revolution, but there will also be companies that will be at a disadvantage.Therefore, companies will need to reduce costs in non-revenue-generating areas and redouble their use of AI.” says.
“This is more of a redistribution than anything else because 95% of the cost savings are in the rearview mirror. But the strong will get stronger and the weak will be exposed.”
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But which hand is it? Apple may be looking to boost sales that have been lagging behind this month's launch of the Vision Pro headset and new iPhone models with generative AI capabilities. China's economic downturn has forced the company to cut the prices of many smartphones and hope for a recovery.
Last week, Bank of America securities analyst Wamsi Mohan expressed optimism about Apple's year ahead, suggesting that “promising AI capabilities” could lead to “an enhanced multi-year iPhone upgrade cycle.” did.
Ives said increased demand for enterprise software and cybersecurity, as well as a surge in demand related to major AI projects, will be key to earnings season and will continue to do so as the AI revolution gains momentum.
Winners have already emerged. Last week, Microsoft surpassed Apple as the world's most valuable company for the first time since 2021, with a market capitalization of nearly $3 trillion. Microsoft cut 16,000 jobs from 232,000 employees last year, but Wedbush recently said that Microsoft's lead in AI will boost the company's revenue by $25 billion by 2025. I calculated that it was possible.
“The move to cloud and AI is having a huge impact on technology, including the reallocation of jobs and many changes to Apple and Google,” Ives said. “AI monetization has begun with his Nvidia and Microsoft, and we believe we are seeing the beginning of a new tech bull market starting in the summer of 2023.”
Source: www.theguardian.com
