This winter, it might be a little challenging to sing along to the popular song, “Tis The Season To Be Jolly,” for several reasons. As we head into the holiday season, the Big Tech layoffs have sent shockwaves not only through the tech industry but has made everyone weary of the impact it will have on the rest of the economy.
So, what happened? Several reasons are being attributed to the seismic activity that is shaking everyone up in the world of media and tech. As if the depreciation of third-party cookies and focus on customer identity to the fundamental shift in streaming as a business model wasn’t enough, macroeconomic factors and layoffs have been added to the list.
In this deep dive, Anand and Kavita talk about the mood of the market and whether we should brace for impact as we head toward 2023.
This winter, we are headed for darker times. According to Layoffs.fyi, over 1,20,000 employees have been laid off from around 814 tech companies. While Amazon attributed its job cuts to an “unusual and uncertain macroeconomic environment”, Zuckerberg bet the farm on Metaverse and laid off 11,000 workers across the globe. Count Twitter, SNAP, Lyft, Stripe, and Shopify, and the list only becomes more heart wrenching. As the headwinds of a global downturn make their way across the world, it’s time to brace for impact.
It’s safe to say that every tech company is gearing up for a choppy 2023. There’s a lot of sentiment in the market that is not very positive. But people have their conclusions as to why this is happening and not all believe it’s because of the war in Ukraine or other macroeconomic factors.
Eric Benjamin Seufert on his blog Mobile Dev Memo gave his own take on all the earnings reports and observed that every tech company that had a bad earnings season, is blaming macroeconomic factors. He believes that the macroeconomic factors are a diversion tactic to take away from the impact of ATT. This is because advertising groups like Publicis, WPP and Omnicon reported strong earnings. All these companies are not particularly affected by ATT. So, no one is sure what is really going on.
One thing is for certain, 2023 is going to be a year, where everyone is going to be bracing for impact. Everyone will be a lot more cautious and will look at different avenues for advertising. And ad spend will slow down. Every time the world goes through a recession, the advertising industry is the first one to be hit. The crypto and the NFT market will finally correct themselves to a place that makes some sense.
Ultimately, every company will try and make it to the end of 2023 and then figure out what to do from there. Because crisis always brings with it, a point of transformation. And we’re going to see a lot of change in the industry because of this.