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It’s a tsunami of bad news coming from technology.

For two years, the covid-19 pandemic saw the tech sector see at least some growth while the rest of the world ground to a halt. People only interacted through the products and services of technology companies.

Now the economy is slowing and the game for the tech sector is changing, but not in a good way. The industry is being hit hard as the world’s central banks grapple with inflation, which is at its highest level in 40 years.

After leaving interest rates near zero, the US Federal Reserve has been raising them since March to crush high prices for goods and services, which have hit consumer purchasing power.

Many economists and business leaders say that such monetary policy is likely to cause a so-called hard landing in the economy, a recession. These fears are prompting businesses to delay investment, while households are putting off discretionary purchases such as tech gadgets.

Higher rates, stronger dollar

Higher rates have also helped the US dollar strengthen against other currencies, which eats into the revenue generated in international markets by tech companies when they convert foreign currencies into dollars.

The outlook for the technology sector is, to put it mildly, bleak. And the third quarter results season, which is coming to an end, has confirmed it. Microsoft (MSFT) alphabet (GOOGLE) Amazon (AMZN) Metaplatforms (TARGET) and the company have warned of economic uncertainty.

In response, investors are liquidating tech stocks. Shares of Meta Platforms, parent of Facebook, Instagram and WhatsApp, have fallen 36% in the fourth quarter. Over the same period, Amazon shares fell 23%, Alphabet fell 15% and Microsoft fell 11%.

This bearish move may continue as the industry has just delivered another round of bad news in the form of massive job cuts and hiring freezes.

Amazon, the e-commerce giant founded by Jeff Bezos, said on Nov. 2 that it would “stop incremental new hires in our corporate workforce.”

“We expect to maintain this pause for the next few months and will continue to monitor what we’re seeing in the economy and the business to adjust as we think makes sense,” Beth Galetti, senior vice president of people experience and technology. , he wrote in a message to employees.

“We are facing an unusual macroeconomic environment and we want to balance our hiring and investments with a reflection on this economy. This is not the first time we have faced uncertain and challenging economies in our past,” he explained.

Technological layoffs continue

The move is the latest in a wave of cost-cutting measures by the Seattle-based group in recent weeks. Amazon has already eliminated more than 10,000 jobs in its retail division and put many projects on hold. The company has shut down its Treasure Truck program, a fleet of roving vans that offered daily discounts on a slew of items.

Just a day later, online payments giant Stripe said it would lay off 14% of its staff this week.

“At the start of the pandemic in 2020, the world turned overnight to e-commerce. We saw significantly higher growth rates in 2020 and 2021 compared to what we had seen previously,” he wrote Stripe CEO Patrick Collison to employees.

“The world is now changing again. We face stubborn inflation, energy shocks, higher interest rates, shrinking investment budgets and tighter seed funding,” he continued. “We think 2022 represents the beginning of a different economic climate.”

On the same day, ride-sharing company Lyft (LYFT) also announced a cost-cutting plan, including the elimination of 13% of the workforce, or 683 employees.

“The announced term reduction is a proactive step to ensure the company is set up to accelerate execution and deliver strong business results in the fourth quarter of 2022 and 2023,” Lyft said in a regulatory filing.

In a note to employees, CEO Logan Green and President John Zimmer said: “There are several challenges in the economy. We face a likely recession sometime next year and the costs of rideshare insurance are increasing.”

Microsoft has announced two rounds of job cuts this year, while Meta will cut its workforce for the first time since it was founded in 2004.

As for Alphabet, the parent of Google and YouTube, the company will sharply slow the pace of hiring in the fourth quarter.

Even Apple (AAPL) the demand for iPhones is higher than the supply, it has decided to stop hiring except in research and development.