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Conor Sen

Big Tech Investors Are Done With ‘Science Projects’

Moonshots like self-driving cars that burned cash without generating much revenue have lost their allure in a time of inflation and belt-tightening.

Alexa, where is the revenue?

Alexa, where is the revenue?

Photographer: Daniel Berman/Bloomberg

Slumping stock prices and slowing growth has the biggest technology companies — and investors — thinking about what it will take to reverse their fortunes. Finding new, lucrative sources of growth is the preferred way out, but it's hard to find opportunities big enough to move the needle when your revenues are already in the tens or hundreds of billions of dollars per year.

That makes cost cuts the most obvious way to boost profit, an uncomfortable option for an industry that hasn't had a major belt-tightening phase in 20 years. After investors showed their displeasure with the lack of cost control demonstrated by tech companies in the third quarter, it appears that management teams have had a change of heart. In the past two weeks both Facebook parent Meta Platforms Inc. and Amazon Inc. have begun laying off staff, with plans for about 10,000 job cuts each in various departments. Earlier this week a large investor in Alphabet Inc. wrote to that company pushing for meaningful cost cuts there as well. (Elon Musk cut about half the workforce at Twitter Inc. after his takeover, but that's a different story.)