Source: Amazon Earnings Reports

Uncertain Economy Affects Major Tech Companies Very Differently

Once, it was an accepted fact that if the U.S. economy had two successive quarters of negative growth you called it a recession. That’s what the latest numbers have born out for 2022 thus far. Numerous internet and tech companies have been laying off workers.

However, in a world where it seems up is down and down is up, it might be hard to say if a dreaded recession is imminent. Also, one company’s recession is another company’s hiring spree.

Case in point: Amazon vs. Microsoft

Amazon sheds a record number of workers

The company’s headcount declined by 99,000 employees from the first to the second quarter, down to 1.52 million people, the largest sequential drop in its history, after overstaffing its warehouses to handle pandemic-driven demand. The decline was primarily due to attrition in Amazon’s fulfillment and distribution network. Amazon also plans to become more cautious in its hiring at its headquarters and other offices.

“I think it’s right for people to step back and question their hiring plans,” said Amazon CFO Brian Olsavsky, alluding to other major tech companies that are also slowing their growth. “We’re doing that, as well. I don’t think you’ll see us hiring at the same pace we did over the last year, or the last few years.”

And that’s not all the hard choices Amazon is making.  They are sitting down their cloud storage service called Amazon Drive. It will shut down on December 31st of 2023 according to a piece in this week.

Amazon actually beat revenue expectations for its fiscal second quarter as the company aims to control costs and deal with ongoing inflationary pressures.

So Amazon laid off 99,000 people. But the good news is the job market is so strong in the U.S. currently, that many of those lay-offs could be short-lived.

Microsoft adds record number of workers

The company had 221,000 employees as of June 30, an increase of 40,000 people or 22% from the same point the prior year. It’s the largest annual increase in employment in Microsoft’s history, based on data tracked by GeekWire.

And there is other Microsoft news. Family, friends, and colleagues shared their memories of Richard Tait, the serial entrepreneur, Microsoft vet, and co-creator of the popular board game “Cranium” who died this week at age 58.

And what might be the biggest news from Microsoft this week? Calling it a “moon landing moment” for the data center industry, the tech giant successfully demonstrated a large-scale generator that runs on hydrogen fuel cells as a cleaner way to keep the internet humming.

So whether it’s a recession or not, AI promises to keep people employed across the spectrum of professions in America.