Big Tech got the pandemic wrong but one company emerged on top

The advent of human-sounding robots really exposes robot-sounding humans.

No machine could sound as devoid of human feeling as the Amazon memo sent at the start of the year entitled: “Update from CEO Andy Jassy on role eliminations”.

After taking a sideswipe at “one of our teammates [who] leaked this information externally”, Jassy failed to give much explanation for 18,000 job cuts other than “the uncertain economy and that we’ve hired rapidly over the last several years”. It is questionable how much comfort “those impacted by these reductions” took from Jassy’s attempt at consolation: “You have made a meaningful difference in a lot of customers’ lives.”

Amazon was the worst in the series of Big Tech lay-off memos. The least wooden, perhaps surprisingly, came from Meta’s Mark Zuckerberg, who is cutting 11,000 jobs. The Facebook co-founder fessed up to his company’s specific predicament: tougher Apple privacy measures mean advertisers receive less information about Meta’s users so they have cut their spending.

But he also neatly summarised the pandemic tech bubble: “At the start of Covid, the world rapidly moved online and the surge of ecommerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended.” But, he concluded, “I got this wrong.”

He was not alone. At the start of the pandemic, Microsoft’s Satya Nadella trumpeted “two years’ worth of digital transformation in two months” and confidently identified “systemic structural changes across all of our solution areas that will define the way we live and work going forward”.

Announcing 10,000 lay-offs this month, Nadella only hinted at his error: “We saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less.”

Alphabet’s Sundar Pichai, who is cutting 12,000 roles, got a bit closer: “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”

All that hiring still leaves the companies with many more staff than in 2020, even after the lay-offs. But beyond these common errors about lasting change from the pandemic and the adaptation of cutting jobs, there is a hugely varied market performance.

Amazon shares are barely changed compared with the start of 2020 — in the intervening years hundreds of billions of dollars of equity value was added, then vaporised. At Meta, it is much worse. A year ago the social network group was still ranked in the top 10 in the Financial Times’s prospering in the pandemic series for market value added. Its shares have since halved; it is down more than $200bn on pre-pandemic market value.

Not every pandemic high was followed by a major comedown. For all their recent challenges, Microsoft and Alphabet are still in the top five companies in the world for equity value added since the start of 2020. Their pandemic predictions of digital transformation fell short, but they still came out on top.

Or near the top. The very top spot is occupied by the sole big tech company to avoid mass lay-offs. Unless there is unwelcome news when Apple reports earnings next week, the company has escaped the mass layoffs of its peers — and chief executive Tim Cook has avoided the memo writing competition.