Last February, investor George Schultz wrote ‘Dot-Com Déja Vu?’ on Forbes. He published an article entitled He noted that the behavior of the tech sector market is similar to that experienced by the dot-com bubble. Now, tech companies’ annual losses of $2 trillion according to Cinco Días, and the mass layoffs of many, are spreading the idea: Are we in for a second bubble?

Dotcom 2.0 threat. Debarghya Das, founder of the Glean company and a former Google employee, posted a tweet on November 14th, listing the layoffs made by major tech companies this year. Data analyzed by Layoffs.fyi amounted to more than 120,000 layoffs. He then compared them to the 107,000 jobs removed by the bursting of the dotcom bubble between 2000 and 2001, warning that the now announced layoffs are the start of a “brutal technological winter.”

The perfect storm. According to Daily Mail correspondent Sam Tonkin, the reason for this massive staff cut is a “triple trouble” consisting of the slowdown in the economy during the pandemic, inflation and the end of growth experienced by technology companies; growth is linked, among other things, to the rise of e-commerce and remote work.

Add to this the consequences of the Russian invasion of Ukraine, the threat of further regulation of the activities of tech companies, and an increase in interest rates, according to Retail Banker International.

surprise. This took the tech industry by surprise, as Mark Zuckerberg admitted in his November 9 post announcing the layoffs of 11,000 workers: “Many were anticipating sustained momentum. after the pandemic is over. Me too (…). Unfortunately, this did not happen as expected. In fact, Meta’s losses in the stock market this year are considered by Axios as one of the evidence confirming the existence of a new dotcom bubble. However, there are those who do not agree with this approach.

Changes. Enrique Dans, a professor at IE Business School, denied that a second dotcom bubble had recently burst on Cadena Ser, noting that what had happened was a shift in the economic and regulatory climate. Specifically, he spoke of the US government’s intention to impose more control on big tech companies, which creates a more hostile environment for Big Tech and gave an example of what happened in China, where some key tech companies lost a lot of value. this year.

To all this, we must add the change in privacy policies implemented by Apple, which, as BBC correspondent Zoe Kleinman points out, affects the advertising revenues of big tech companies. On the other hand, every tech company has its own problems: For example, Meta, the owner of Instagram, has to deal with competition from Tik Tok; and Twitter is experiencing the consequences of the prospect of becoming a paid social network.

It’s hard to believe that Big Tech will suffer the same fate as dotcoms at the turn of this century. It is logical to think that Big Tech is in a volatile period, as Enrique Dans points out. Time will show us.

Image: Pixabay