While the global economy is sinking, the four biggest American tech companies are each worth more than US$1 trillion, a landmark that was last reached before the coronavirus pandemic struck the U.S.
According to a report by CNBC, this week, the outstanding performance of Amazon, Alphabet, Apple and Microsoft shows the resilience of the US tech industry in the face of a global pandemic, recession and record unemployment.
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Alphabet, parent company of Google, was the latest to re-enter the trillion-dollar club, reaching US$1.02 trillion in market value during trading on Monday. Apple was valued at US$1.63 trillion, followed by Microsoft at US$1.61 trillion. Amazon, which has largely benefited from stay-at-home orders that battered most companies, was valued at US$1.48 trillion in early trading.
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The valuations were boosted by a strong morning for U.S. markets. The Dow Jones Industrial Average was up 1.7 percent, while the S&P 500 gained by 1.4 percent. The tech-heavy Nasdaq Composite jumped by 1.6 percent to an all-time high.
Amazon, Google, Apple and Microsoft: Defying the Global trends of recession?
The global coronavirus pandemic is prompting a dramatic reversal of fortune for the tech giants. Amazon and Facebook are capitalizing on the fact that they are viewed as essential services for the public in lockdown, while Google and Apple are building tools that will enable state health departments to provide a critical public service, tracing the course of potential new COVID-19 infections.
Current forecasts suggest that the coronavirus (COVID-19) global recession will be the deepest since World War II, with the largest fraction of economies experiencing declines in per capita output since 1870. https://t.co/2LJPNSaZBT
— Jesús Serafín Pérez (@JesusSerafinP) July 7, 2020
While the global economy faces potential unemployment and contraction not seen since the Great Depression, the tech giants — and a handful of medium-size ones — are already benefiting from new consumer habits initiated during the lockdowns that analysts believe will turn into longer-term shifts in how people shop, work and entertain themselves.
The broader stock markets tanked in recent weeks, but share prices of Amazon and Microsoft hit at or near records. Facebook is moving to acquire high-skilled talent, announcing the hiring of 10,000 new workers this year.
Powerful Companies can bounce back: Ex-Google CEO
Former Google CEO Eric Schmidt said at a recent virtual panel that the most powerful companies have the ability to bounce back far more quickly than others. “When you have an industry leader, and something collapses, the industry leader, if it’s well-managed, tends to emerge stronger a year later,” he said.
As the economic contraction continues and start-ups die off, the largest firms may also be some of the only companies in the position to do any hiring. In a recent interview, Sheryl Sandberg, chief operating officer of Facebook, made a point of highlighting that the company would create 10,000 new positions this year in engineering and product roles.
Amazon executives have also launched a media blitz, touting the company’s role in supplying important goods to consumers.
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Amazon created 175,000 jobs during pandemic?
Amazon is leading the biggest hiring spree of the tech giants, announcing more than 175,000 new, mostly low-wage jobs in warehouses and delivery. The company is openly recruiting workers who have been laid off from other industries, as it has struggled to keep up with the surge in consumer demand.
Meanwhile, some of its warehouse workers have protested over unsafe working conditions, as dozens of warehouses have workers that tested positive for covid-19.
“We’re investing heavily to keep our employees safe and to temporarily increase pay for associates — spending $500 million on pay increases alone through the end of April,” Amazon‘s Perlet added in the statement.
Meanwhile, Bloomberg reported that Apple chief executive Tim Cook recently told employees that the company felt so comfortable in its cash position that it would continue investing in R&D throughout this year and did not anticipate layoffs.
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Big Tech’s ability to continue hiring and sustaining themselves through crises will not only give the companies an advantage in Silicon Valley, but in the economy at large. Many of the traditional industries expected to suffer — brick-and-mortar retail, food service, and media and entertainment — are the same industries that have been gradually gutted by technology since the last recession.
As the global economy is facing unprecedented challenges, Amazon, Alphabet, Apple and Microsoft are making new records or accumulating wealth through relying on technology.