Ride-sharing firm Lyft Inc. and layoffs at payments company Stripe Inc., as well as Amazon.com Inc. The stagnation in hiring reflects a deeper approach to technology.
Enterprise technology has so far been a relative bright spot within this field. This may continue, but with an increasing emphasis on companies and services that are deemed critical to running a business and that can be monetized immediately.
The business case for the adoption of cloud computing and automation is fundamentally strong, said Sunil Kanchi, who serves as chief information officer and chief investment officer of UST, a privately held company in Aliso Viejo, Calif. A company that assists customers in digital transformation. UST operates internationally and has over 30,000 employees.
“The changes we will see going forward will be entirely based on economic drivers of the economy slowing down,” Kanchi said.
He expects customers to continue to invest in areas such as automation and so-called low-code no-code software platforms, which reduce the need for human programmers, which are in short supply.
Metaverse, NFTs, and some aspects of cryptocurrency, or technologies that do not have immediate monetary value, will fall out of favor, Mr. Kanchi said.
“Job cuts are only the beginning and tip of the spear. Larger and more thoughtful companies are beginning to understand that capital is shifting from investing in the stock market to investing in ‘safe’ assets such as bonds or treasuries as interest rates rise,” Wesley Chan, an investor and former Google tech leader who developed early Google projects including Google Analytics, Google Voice and Google Ventures. He is the co-founder of early stage investor FPV Ventures.
“The recession has kind of started, but it hasn’t reached the bottom and will get worse very quickly, probably around the middle of next year,” Mr Chan said. They expect a drop in demand for marginal or luxury sectors such as crypto, grocery and so on. Food delivery services, “Neobanks,” and high-end travel and beauty.
Demand for business-critical services that feel like utilities will be better. According to Mr. Chan, the approach to drug discovery and life sciences, cybersecurity, and companies that help customers overcome costly inefficiencies or unlock inventory the way Uber Technologies Inc. or Airbnb Inc. is promising is promising. He predicts that “the new Google or Uber of 2023 and 2024 will come out of this recession.”
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