Google To Amazon Employee Layoffs, What's The Prospect Of Investing In The Technology Sector?

JAKARTA - Google announced the largest layoff (PHK) in the company's history, reaching 12,000 employees.

While Amazon cut nearly 18,000 of its employees. And latest, Spotify cut 400 employees.

Then, what is the investment prospect in the technology sector in 2023?

Segara Director Insitute Piter Abdullah said the phenomenon of layoffs in the technology sector was caused by many factors. Not only is the economic factor weakening. But also because the technology sector is growing too fast, so it must experience a correction.

According to Piter, the momentum correction occurred amidst declining global conditions.

Even so, he considered this correction to be a normal phenomenon, as a business cycle.

"The future of the digital industry itself remains promising in line with the direction of the future which is certain to be digital life," he said when contacted by VOI, Tuesday, January 24.

Piter predicts that this year will be better than the previous year for the technology sector industry. Even though it is not yet at the stage of revival.

"In 2023, I estimate it will not be a year of revival of the digital industry. But in 2023 it will not be as happy as in 2022," he said.

LAYOFFS Still Continue

Different views, Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira said the trend of layoffs in the digital sector would continue with four main causes.

"First, due to reduced advertising revenue and premium services for digital companies due to the threat of economic recession, especially customer bases in countries such as the US and Europe," Bhima told VOI.

Second, the change in consumption pattern, which was previously fully online during the pandemic, has finally returned to physical shopping.

Third, rising interest rate pressures, prevent investors from buying the assets of technology companies because they are considered too risky.

Finally, said Bhima, several companies see the current economic situation as an opportunity to close non-promising or non-profit business lines.

According to Bhima, the global company's consolidation trend will continue at least until economic conditions improve.

He said, the impact on the economy was immediately felt, especially in US companies that have business branches in Indonesia.

So far, the impact of layoffs has only been felt in a small part of the financial and digital services sector. The situation in the US really needs to be watched out for, but in the last 5 years, Indonesia's economy has actually depend more on China, Japan and South Korea," he said.