It’s show time for big-tech names such as Amazon, Microsoft and Meta this week.
But not in the way you think.
Nothing to do with the release of ChatGPT28 out of Microsoft. No Reality Lab goggles out of Meta that will also help walk your adorable puppy by saying “walk adorable puppy.” No new Alexa feature that will allow you to write a will while standing in line for a heart-pounding extra caffeinated coffee (or maybe…).
Nope, this isn’t innovation reveal week for big tech — it’s an earnings week where these market-moving household names and others must justify the runs year to date (Meta shares up 76% this year…) in their stock prices. And the best way they could do this is giving investors a taste of the profit boost to come later this year from their mass layoffs that began in late 2022 and have stretched into 2023.
“3Q and 4Q is where many of these cost cuts will be reflected front and center. Great set up for tech into the second half of the year in my opinion as the tech haters continue to hate,” Wedbush veteran tech analyst Dan Ives told me.
My guy Ives is likely right on the favorable setup simply by looking at the deep cost cuts taken by scores of big tech names in under a year.
The running total for tech layoffs for 2023 stands at 168,243, according to numbers crunched by Yahoo Finance sister publication TechCrunch. Layoff tallies are starting to reach eye-popping levels, as to suggest looming profit jolts.
Meta, for example, said last week it will layoff 10,000 people. That’s on top of 11,000 layoffs enacted back in November 2022. Lyft said late Friday it will slash another 1,200 jobs. Last November, Lyft sent 13% of its workforce packing.
These companies are among the likes of Microsoft and Salesforce laying off thousands of people as tech finds religion on expense management.
More mass layoffs for the space are probably ahead, too. Canning people, seeing profits improve and then stock prices go up is often infectious in C-suites…until everyone decides to go back into reinvestment mode.
It’s inevitable, then, that investors will soon see the efforts of tech’s pink slips.
Happy Trading!
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations or anything else? Email [email protected]
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