Cost cuts continue to be a priority for technology leaders. As many of them enjoyed rebounding stock prices from a brutal 2022, they made it clear that customers will be conservative with their spending for the near future, and the days of tech excess are behind us.
Why it matters: For technology leaders, cost cuts have become a priority. With customers spending conservatively for the near future, reallocating headcount and spending toward revenue drivers, and decreasing long-term costs for computers, supply chain, and inventory is the planned path forward. However, companies are walking a tightrope, reminding investors of the importance of spending in key areas such as cloud infrastructure and AI initiatives while maintaining diligence with broader cost cuts.
- Among the most-valuable U.S. tech companies, two big areas for increased investment are cloud infrastructure and AI initiatives. Microsoft will prioritize its cloud business, which is seeing an increase in short-term customer contracts. Amazon is reducing its workforce by 27,000 people.
- Microsoft CEO Satya Nadella recently informed staffers that there will be no salary increases for full-time employees after the company announced 10,000 job cuts earlier this year. At Alphabet, Google’s parent company, CEO Sundar Pichai has been focused on efficiency.
- Alphabet also plans to It also plans to better manage supplier and vendor costs, plus use AI and automation to improve productivity across Alphabet.
