Big Tech Takes a Dip in the Recession Pool and Makes a Splash

The sorrows of tumultuous macroeconomic conditions and an unstable foreign exchange continue for big tech companies.

The last quarter was abundant with tales of unemployment woes, as big tech firms—with the exception of Apple, of course—took a page out of the “Scissors of Savings” handbook and made their workforce the first line of items to be trimmed in their quest for cost-cutting. 

Let’s take a closer look at some of the key highlights from the latest earnings reports of the top tech companies to better understand what the future entails for them. 


Meta’s Q4 earnings call reported a total revenue decrease by 4% this quarter. Despite this, it seems like a strong reckoning for Meta after an abysmal last quarter. The company’s shares soared nearly 20% after earnings, highest since 2013. 

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The Cambridge-based company has been focusing on segments that include AI discovery engine, ads, business messaging, generative AI, and platforms for the metaverse. 

Historically, Meta’s pet project—its ‘Reality labs’ segment—has been in the barrel for producing extremely low return on investment. The same continues through this quarter as well. The Q4 revenue decreased by 17% due to lower sales of Meta’s VR headset, ‘Quest 2’. The only silver lining here was that active users on its Family of Apps saw an uptick, with ad impressions witnessing an 18% increase on a YoY basis. 

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However, the price per ad continues to decrease, this time by 16%. Apple’s strong stance against advertising continues to be a hurdle for Meta, as they look to adopt tools that can mitigate such challenges. 

In 2023, Zuckerberg stated that the company’s strategy would be oriented towards a focus on efficiency and removal of redundancies offered by a structure that involves ‘managers managing managers’ alongside keeping the organisation strong and nimble.  


Alphabet’s consolidated revenue increased by 1% this quarter. It would not be an overstatement to claim that Google’s advertising revenue had taken a serious hit this quarter, leading to earnings much lower than analysts’ expectations. 

Youtube and network advertising revenue decreased by 8% and 9% respectively, whereas Google search and other advertising revenue decreased by 2% this quarter. Google’s Cloud segment, on the other hand, witnessed a revenue growth of 32% this quarter. 

Google’s outlook ahead was further affirmation that they are an AI-first company. Firstly, in an attempt to quickly latch on to the generativeAI rage, it announced the release of ‘LaMDA’ in the near future for public use. The company also boasted a response to the ChatGPT challenge, announcing that it would integrate its “newest, most powerful language models” to certain aspects of their business like Search, Gmail, and Google Docs soon. 

Furthermore, Deepmind’s growing role in Google services and Google Cloud means that the company’s costs will now be included in Alphabet’s overall expenses instead of being separated and labelled as ‘other bets’ as was done in the past.

Like Meta, Google is also looking to leverage the power of AI for new and engaging experiences to drive higher ROI and provide advertisers with advanced tools for producing creative content.


Amazon’s Q4 net sales turned out to be better than expected. The e-retailer—which boasts higher return on advertising spend for brands and sellers on their website, apps and media properties compared to the likes of Meta and Google—clocked an impressive 19% increase compared to the previous year. 

However, Amazon’s cloud services—often said to constitute the highest market share—witnessed a rather grim quarter with only 20% of growth compared to 27.5% in the third quarter. The reason for the downward growth can be attributed to the current macroeconomic conditions where enterprises are looking to optimise cloud spending by choosing customised solutions rather than a full suite. 

Despite all efforts to cut costs, Amazon recorded high operating expenses and posited three central reasons for it—employee severance, impairments of property and equipment and operating leases, and changes in estimates related to self-insurance liabilities. 


Apple is the only company that has not resorted to widespread layoffs. More importantly, it has been able to lead its operating expenses significantly lower than its guidance range. 

Apple CEO Tim Cook said, “We’re also recognizing the environment that we’re in is tough. And so we’re cutting costs. We’re cutting hiring, we’re being very prudent and deliberate on people that we hire.” 

The current macroeconomic conditions and supply chain disruptions from China did impact its overall sales, bringing it down 5% from last year. It was the largest quarterly revenue drop for Apple in nearly seven years. However, on the bright side, Apple’s service offerings are only growing. The company set an all-time revenue record from a host of services such as App store subscriptions, cloud and payment services. 

Furthermore, the company also revealed that it witnessed all-time iPhone revenue records for India, while also hinting that it would soon bring Apple retail in India. 


Amidst all the chaos over Microsoft’s partnership with OpenAI, revenue this quarter was increased by 2%. Microsoft experienced a modest increase in Azure usage and a slower-than-anticipated growth in new business for its standalone Office 365, EMS, and Windows commercial products.

Similar to AWS, Azure is also struggling with macroeconomic headwinds where customers are increasingly optimising their cloud spend. The company also witnessed a decline in advertising spend for search, news advertising, and LinkedIn marketing solutions. 

Overall, the sorrows of tumultuous macroeconomic conditions and an unstable foreign exchange continue for big tech companies. On the path to optimise expenses, the route of layoffs and restructuring have been the primary responses for most of them. The impact of these evolving market dynamics and measures to mitigate concurrent losses is evident in the companies’ earnings reports. However, this downtime has also been a motivation for them to evaluate which of their multiple divisions are making a significant impact and will drive future growth.

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by Vijayalakshmi Anandan

The Deep Learning Curve is a technology-based podcast hosted by Vijayalakshmi Anandan - Video Presenter and Podcaster at Analytics India Magazine. This podcast is the narrator's journey of curiosity and discovery in the world of technology.

Ayush Jain
Ayush is interested in knowing how technology shapes and defines our culture, and our understanding of the world. He believes in exploring reality at the intersections of technology and art, science, and politics.

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