Apple, Amazon, Microsoft, Google and Facebook enter the scene

These are the companies whose names are part of the daily lives of consumers.

It is almost impossible to escape them in many daily economic activities.

They are in the top 10 most valuable companies in the world and are multinationals present in hundreds of countries around the world. Between the five tech giants, their value is $7.6 trillion in market capitalization. Suffice to say that their weight in the economy is enormous.

At a time when investors are wondering if the economy will experience a hard landing, that is to say enter a recession in the coming months due to inflation at its highest level in 40 years and a policy of raising interest rates at the Federal Reserve, these companies can give the temperature of the economic machine.

Companies by market capitalization include Apple (AAPL) – Get the Apple Inc. ($2.5 trillion at time of writing), Microsoft (MSFT) – Get the Microsoft Corporation report ($1.95 trillion), Alphabet (GOOGL) – Get the Alphabet Inc. report.parent company of Google, ($1.42 trillion), Amazon (AMZN) – Get the report from Amazon.com Inc. ($1.25 trillion) and social media giant Meta Platforms (META) – Get the report from Meta Platforms Inc., parent company of Facebook, Instagram and WhatsApp ($458 billion). Some of them have already given a taste of what awaits them by freezing hiring and removing job vacancies.

How bad is the economy?

Coincidence or not, the GAFAM, as they are often nicknamed, publish their quarterly results this week. These results, but especially the comments of their leaders on the health of the economy, are eagerly awaited. Investors’ questions are many, but if we could only choose two, it would be: have consumers started to reduce their spending? Have companies started to pause investment and cut marketing budgets?

Software giant Microsoft will get the ball rolling on July 26. The activities of the Redmond group in Washington State affect both companies (cloud with Azure, IT security) and consumers (Xbox consoles, video games, Windows software, Office). The firm recently announced cost-cutting measures, such as layoffs, with a clear message: Microsoft is bracing for tough times ahead.

The company, led by Satya Nadella, has decided to cut many vacancies: key divisions like the cloud business, Azure, and the security software unit, which are seen as two key growth areas for the giant of software from Redmond, Washington, are affected by the removal of job postings.

“As Microsoft prepares for the new fiscal year, it is ensuring the right resources are aligned with the right opportunity,” the spokesperson said in a July 21 emailed statement. “Microsoft will continue to increase its workforce over the coming year, and we will place greater emphasis on where these resources go.

Are other cost reduction measures in preparation?

Job cuts in sight?

Also on July 26, internet giant Alphabet delivers its financial performance. Fears are that companies large and small have started cutting funds set aside to promote their products and services online. Snap Inc social network (INSTANTANEOUS) – Get the Class A report from Snap Inc. reported disappointing second-quarter sales on July 21, due to a slowdown in online ad spending as competition between platforms for marketing dollars intensified. Are Google and YouTube as affected as Snap?

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“We will slow the pace of hiring for the remainder of the year, while supporting our most important opportunities,” Chief Executive Sundar Pichai wrote in a July 12 memo to employees.

“For the remainder of 2022 and 2023, we will focus our recruiting on engineering, technical and other critical roles, and ensure the great talent we hire is aligned with our long-term priorities.”

Just days after that memo, Google sent out an ominous new warning: The Mountain View, Calif., search, advertising, and cloud company is immediately suspending hiring for two weeks. The company went from slowing hiring for the rest of the year to suspending it, at least temporarily.

“As Sundar announced, we are slowing hiring for the rest of the year. In line with this, we are suspending most new offers for two weeks to allow teams to prioritize their roles and hiring plans for the rest of the year,” spokesman Chris Pappas told TheStreet.

How far will Google go to not be taken aback by bad economic conditions?

Meta, which is stopping hiring, or in some cases slowing hiring for most mid-to-senior level positions, faces the same problem as Google. Additionally, investors expecting an update on its top priority, the Metaverse, as the crypto industry is going through an unprecedented crisis of confidence is another matter.

The firm only plans to hire between 6,000 and 7,000 new engineers in 2022, compared to an initial project of 10,000 new recruits.

“If I had to bet, I’d say this could be one of the worst downturns we’ve seen in recent history,” CEO Mark Zuckerberg told employees on June 30.

Meta, which saw the departure of the emblematic Chief Operating Officer Sheryl Sandberg in June, publishes its results on July 27.

The next day, July 28, Apple and Amazon will take center stage with big questions to answer: Where are the consumers? Is consumer confidence good or gloomy? Are they still spending the same? The two giants could provide clear answers to these questions.

Like other tech giants, they are slowing the pace of their hiring.

Are job cuts in sight?

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