Facebook, Instagram, Twitter, Amazon: these behemoths have shaped our world. This winter, however, the world is shaping them. Faced with a global downturn, a US economy that appears headed for recession and interest rates shooting up across the west, big tech is in big trouble. This week, Meta – the company that owns Facebook, WhatsApp and Instagram – declared it will sack 11,000 employees, or more than 13% of its staff. Last week, Twitter’s new owner, Elon Musk, got rid of half the workforce. In August, Snap, the parent firm of Snapchat, reduced staff by 20%. Amazon has announced a hiring freeze, while the payments-processing platform Stripe is also shedding 14% of its workers.
A bleak winter lies ahead for many of those employees and their families, as well as the firms servicing and supplying the big names in technology. And a moment of reckoning is in store for big tech. For some of these companies and many of their managers, this will be their first serious downturn, and the combination of rising interest rates even as the economy sinks could make it a real stinker. The past decade has gifted Silicon Valley easy money and investors desperate to buy growth as well as gangbuster sales of smartphones – the device that spawned millions of apps. Then came the pandemic, which prompted billions of consumers to buy and socialise online. As Mark Zuckerberg admitted this week, Meta was among those businesses that counted on this huge tide staying in for ever. It hasn’t.
