That’s the total number of tech employees laid off during January’s mass exodus, according to TechCrunch.
After a brutal, tech-driven bear market in 2022, some of the biggest companies around were ready to do anything to help their bottom lines.
Amazon laid off 18,000…
Alphabet added 12,000 layoffs…
Microsoft cut 10,000 of its workforce…
And that’s just three of the worst offenders in that single brutal month. By the end of October, the tech sector had let go of more than 240,000 employees!
Tech layoffs (and layoffs in general) were a major theme of 2023.
As the Federal Reserve hiked interest rates, sustainable growth became much harder to achieve. Companies were just looking to survive — and that meant job cuts.
That’s when using a system like Green Zone Power Ratings is a massive benefit.
In seconds, you can learn if these companies are hacking and slashing their workforce away for the right reason.
Let’s get into it…
While millions shared their Spotify Wrapped — their most-played artists, songs and podcasts of the year — around social media earlier this week, the leading music streaming service announced it was cutting 1,500 jobs, or 17% of its total workforce.
That brings 2023’s total up to roughly 2,300 layoffs for Spotify.
Spotify CEO Daniel Ek summed it up nicely in his email to staff announcing the layoffs: “Economic growth has slowed dramatically and capital has become more expensive.”
Investors took the news well, sending shares 7% higher on Monday. But what’s next?
For some insights there, let’s see how Spotify Technology SA (NYSE: SPOT) stacks up in Adam O’Dell’s proprietary Green Zone Power Ratings system.
SPOT rates a “Neutral” 50 out of 100 in Adam’s system. Neutral stocks are expected to perform in line with the broader market over the next 12 months.
Like other tech stocks we’ve highlighted in Stock Power Daily, Spotify rates poorly on Value and Size. This is a $37 billion company that investors are not afraid to pour capital into.
That’s exactly why it rates an 86 on Growth and an incredible 97 on Momentum. Year to date, the stock is up an incredible 143%!
Green Zone Power Ratings says this is one to watch right now, but I’d keep a close eye on it. I could easily see SPOT’s rating improving, and it’s clear that investors like the company.
The Worst Offender
Amazon.com Inc. (Nasdaq: AMZN) showed more than 27,000 employees the door in 2023.
Of course, that’s only 1.7% of a workforce that’s 1.5 million strong.
Investors in Amazon stock are OK with the news as well it seems. Shares are up 70% year to date, and AMZN now rates a “Bullish” 64 out of 100 in Green Zone Power Ratings.
There’s that low rating on Size and Value again … but it’s paired with strong ratings on Momentum, Volatility, Growth AND Quality.
That last one is big. Stocks that boast high Quality ratings are built to last. These are the companies with strong balance sheets that can weather uncertain market conditions.
Amazon boasted $11 billion in operating income for the third quarter, 343% higher than a year ago! Its net profit margin also grew 205% year over year. Those are just some of the reasons why it rates an 82 on Quality.
While AMZN isn’t in the top echelon of stocks rated by Green Zone Power Ratings, it still looks like a solid investment in our system. Bullish-rated stocks are set to outperform the broader market by 2X over the next 12 months.
Tech layoffs were a major economic theme this year. Companies are cutting back after overextending during 2020’s epic bull market.
And Green Zone Power Ratings helps us figure out which stocks look better now for it.
Until next time,
Managing Editor, Money & Markets