What's Next for Big Tech?

Is a recession looming? If the recent shakeup in Big Tech is any indication, it is certainly possible.

Within the last several months, hiring freezes have given way to significant layoffs. The reasons are diverse: declining users at Facebook, reduced advertising revenue on Twitter, and shrinking margins at Amazon.

Here are some notable layoffs that have occurred in Big Tech just this Fall:

• Amazon is in the process of laying off 10,000 workers (about 3% of Amazon’s corporate employees) in corporate and technology jobs.
• Meta laid off 11,000 workers (nearly 13% of the company) earlier this Fall.
• Twitter has laid off about 3,700 workers (almost 50% of the company) in November.
• Stripe has cut 14% of its workforce.
• Snap cut its workforce by 20%, affecting around 1,200 employees.

According to NPR, representatives for several of the above companies cite rapid growth during the pandemic in tandem with broad economic challenges as reasoning for the layoffs. Representatives for other major tech companies like Apple have announced hiring will continue, but with increased deliberation.

However, hiring freezes and layoffs aren’t the only big change occurring right now in Big Tech. Regulatory concerns, both within the US and EU, will mount serious challenges to the tech industry in the coming year:

In the European Union, Apple may be forced to make major changes to the way the App Store, iMessage, FaceTime, and Siri operate in Europe. The Digital Markets Act (DMA) has announced several milestones for major tech companies to follow in order to expand user interoperability between device types and platforms with relation to messaging, voice-calling, and video-calling. This has the potential to force Apple to allow third-party applications to operate within its iMessage framework in the EU.

Increased Scrutiny of Big Tech by US Government and Regulatory Agencies

The highest levels of the US government have threatened ByteDance, the Chinese owned makers of the?popular app TikTok, with potential regulations. FBI director Chris Wray said in mid-November that U.S. operations of Chinese-owned TikTok raise national security concerns, according to Reuters. It is unknown what the future holds for the application in the United States in the future, as a ban on the app had already been floated previously in 2020. According to Statista, there are roughly 94 million TikTok users in the United States.

US regulators and governing authorities have been fairly ‘hands off’ by allowing Big Tech to grow, largely unregulated. That era may be changing, and increased government oversight and regulations may be upon us.

Now is a perfect time for disruptors to enter the scene. Players waiting on the sidelines during this time of uncertainty would do well to spring into action; they could just define the future of Big Tech.

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