Two of the world’s largest tech companies, Alphabet and Microsoft, have recently reported their sales figures slowing down due to growing fears about the economic climate.
After the recent problems with the global economy, consumers and businesses around the world have started to drastically cut back on spending. Inflation has continued to rise, which has brought higher interest rates and skyrocketing prices on a range of products.
These fears of a global recession have continued to affect sales, and the strong US dollar has also hurt American businesses, as it has become more expensive to sell products abroad.
Alphabet is one company that has announced a downturn in sales. The tech giant, which owns Google and YouTube, says that its sales rose just 6% in the third quarter of this year. Between June and September, the company reported sales of $69 billion.
Apart from the beginning of the COVID-19 pandemic, this was the US-based company’s weakest quarterly growth in nearly ten years. The firm’s sales growth has slowed for the last five consecutive quarters, as consumers and businesses have started to cut back on spending.
Alphabet’s profits fell by nearly 30% in the same period to $13.9 billion and ad revenues for YouTube decreased for the first time since it began reporting these figures.
Another major tech company, Microsoft, has seen a similar situation. The firm said that demand for its products, particularly computers, has weakened recently. It says that sales rose by 11% in the last quarter to $50 billion – the slowest revenue growth it has seen in five years.
Microsoft said that it expected this trend to continue and that demand for computers and other technology products will continue to decline for at least the next year. This includes sales for its Xbox video game business, as sales in this area have also slumped recently.