Big Tech results to test whether layoffs is passing phase or indicator of recession

The earnings and share prices of Big Tech are closely watched as indicators of recession in the US. Between them, the tech giants had announced 87,330 global job layoffs by the end of February.

A slew of Big Tech corporate earnings this week, including results from Google, Microsoft, and Facebook owner Meta, which account for many thousands of jobs in the Irish economy, will help test whether a rapid round of global layoffs is set to pass quickly, or is a warning that recession is looming in the US.   

The tech corporates, which also include online shopping giant Amazon, troubled social media giant Twitter, and payments firm PayPal, between them announced 87,330 global job layoffs by the end of February, according to estimates by the Central Bank. 

Some of the US-owned information and communication technology firms had since doubled down by announcing further layoffs, but calculating the fallout for Ireland, where many have based their European head offices, is complicated because tougher employment protections make it more difficult for Big Tech to secure instant layoffs in Europe compared with the US.   

However, official Irish figures suggest that so far the fallout has been limited on the wider economy here, and some experts say the number of global layoffs have brought their global staff numbers back to levels before a hiring boom during the pandemic.    

Many tech giants prospered during the covid years because much of the world's office workforce was working remotely. Since then, global banking turmoil and rapidly rising interest rates havehit the tech sector, raising concerns that the US is heading into a recession.  

Google-owner Alphabet and Microsoft — which together directly employ 9,000 people in the Republic — report their latest earnings on Tuesday night. 

Shares in Alphabet have fallen 11% from a year ago, but are sharply higher since before the onset of the pandemic. Microsoft shares are slightly higher from a year ago and are also significantly higher compared with early 2020. 

Shares in Meta, which reports on Wednesday night, have climbed 15% in the year and trade close to their early-2020 levels. 

Shares in Amazon, which reports on Thursday night, have fallen 27% in the year, reflecting fears of a slowdown in US consumer spending. They are, however, still slightly above their early-2020 price levels. 

Apple is due to report its quarterly earnings next week.