Even the deepest pockets have their limits. Amazon and Google-parent Alphabet sit on a combined $184 billion in cash and short-term investments. Those two, along with big tech peers Microsoft, Apple and Facebook-parent Meta Platforms, hold the highest such balances among nonbanking companies on the S&P 500, according to data from S&P Global Market Intelligence.
Amazon and Alphabet are also currently generating just under $95 billion combined in annual free cash flow. Not hurting, in other words. But the two clearly aren’t feeling a license to spend freely either.
Google began laying off hundreds of employees this week across several divisions, including its Google Voice assistant and device businesses that include Nest and Fitbit, according to a report Thursday by The Wall Street Journal. Amazon is also laying off employees in the hundreds, mostly in its Prime Video, MGM Studios and Twitch businesses. Neither company disclosed the exact numbers, though the latest cuts are much smaller than reductions in 2023, which saw Google laid off 12,000 workers and Amazon cut loose more than 18,000.
Now might seem an odd time for cuts. Amazon and Google have crawled out of the postpandemic slump that crimped sales in 2023, with marked improvements in their core businesses of e-commerce and online advertising, respectively. In the coming fourth-quarter earnings season, Amazon is expected to report revenue growth of 11% year over year compared with 9% growth in the same period last year, while Alphabet’s growth is seen jumping from 1% to 12% for the same period, according to consensus estimates from FactSet.
Read more on livemint.com