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Microsoft Tops Apple to Become Most Valuable Public Company

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The shift is indicative of the importance of new artificial intelligence technology to Silicon Valley and Wall Street investors.For more than a decade, Apple was the stock market’s undisputed king. It first overtook Exxon Mobil as the world’s most valuable public company in 2011 and held the title almost without interruption.But a transfer of power has begun.On Friday, Microsoft surpassed Apple, claiming the crown after its market value surged by more than $1 trillion over the past year. Microsoft finished the day at $2.89 trillion, higher than Apple’s $2.87 trillion, according to Bloomberg.The change is part of a reordering of the stock market that was set in motion by the advent of generative artificial intelligence. The technology, which can answer questions, create images and write code, has been heralded for its potential to disrupt businesses and create trillions of dollars in economic value.When Apple replaced Exxon, it ushered in an era of tech supremacy. The values of Apple, Amazon, Facebook, Microsoft and Google dwarfed former market leaders like Walmart, JPMorgan Chase and General Motors.The tech industry still dominates the top of the list, but the companies with the most momentum have put generative A.I. at the forefront of their future business plans. The combined value of Microsoft, Nvidia and Alphabet, Google’s parent company, increased by $2.5 trillion last year. Their performances outshined Apple, which posted a smaller share price increase in 2023.“It simply comes down to gen A.I.,” said Brad Reback, an analyst at the investment bank Stifel. Generative A.I. will have an impact on all of Microsoft’s businesses, including its largest, he said, while “Apple doesn’t have much of an A.I. story yet.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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    Google Employees Brace for a Cost-Cutting Drive as Anxiety Mounts

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    The tech giant has so far taken steps to streamline without mass layoffs, but employees are girding for deeper cuts.Google workers in Switzerland sent a letter this month to the company’s vice president of human resources, outlining their worries that a new employee evaluation system could be used to cull the work force.“The number and spread of reports that reached us indicates that at least some managers were aggressively pressured to apply a quota” on a process that could lead to employees getting negative ratings and potentially losing their jobs, five workers and employee representatives wrote in the letter, which was obtained by The New York Times.The letter signaled how some Google employees are increasingly interpreting recent management decisions as warnings that the company may be angling to conduct broader layoffs. From the impending closure of a small office and the cancellation of a content-moderation project to various efforts to ease budgets during 2023 planning meetings, the Silicon Valley behemoth has become a tinderbox of anxiety, according to interviews with 14 current and former employees, who spoke on the condition of anonymity for fear of retribution.In some cases, Google employees have reacted to a program that the company began in July to simplify operations, cut red tape and make itself more productive. In other instances, they have had budget conversations, with some teams unable to hire more next year, the people said. And workers have also fretted over decisions made months ago that, to some, have taken on new meaning, they said.The worries have grown as Google’s tech industry peers have handed out pink slips amid a souring global economy. Last month, Meta, the owner of Facebook and Instagram, purged its ranks by 11,000, or about 13 percent of its work force. Amazon also began laying off about 10,000 people in corporate and technology jobs, or about 3 percent of its corporate employees.Even Google, which is on track to make tens of billions of dollars in profits this year, has had to come to terms with a slowdown. In October, as the digital advertising market slumped, Google’s parent company, Alphabet, reported that profit dropped 27 percent in the third quarter from a year earlier, to $13.9 billion.Google did not comment on employee anxiety in a response to a request from The Times. Sundar Pichai, the chief executive, said in October that the company would “focus on a clear set of product and business priorities.” He also said it would slow hiring and “moderate” the growth of its expenses.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Delivery Workers: Food app services are warning that a proposed wage increase for delivery workers in New York City could mean higher delivery costs.A Self-Fulfilling Prophecy?: Employees seeking wage increases to cover their costs of living amid rising prices could set off a cycle in which fast inflation today begets fast inflation tomorrow.Disabled Workers: With Covid prompting more employers to consider remote arrangements, employment has soared among adults with disabilities.A Feast or Famine Career: America’s port truck drivers are a nearly-invisible yet crucial part of the global supply chain. And they are sinking into desperation.Unlike other big tech companies, Google has so far avoided large-scale job cuts. Still, investors have pushed the company to become more aggressive about “defending” its huge profits, said Mark Mahaney, an analyst at Evercore ISI.“One of the most obvious ways to do that is to cut costs and reduce your employee head count,” he said. He added that it was “kind of odd” that Google’s parent had hired 30,000 employees in the last three quarters, given the economic trends. At the end of September, Alphabet had 186,779 workers.In recent months, Google has appeared to pay more attention to costs. In July, it started the program to streamline operations. Soon after, it canceled some projects, including the Pixelbook laptop and Stadia, its streaming platform for video games. It has also reduced funding for Area 120, an in-house product incubator.At one recent meeting, a Google human resources representative told a worker that the company would revisit the possibility of broader layoffs in the new year, and that it was a decision for Mr. Pichai, according to an audio recording obtained by The Times.Google has told other employees that it would put a priority on trimming real estate expenditures, travel costs and perks before it pursued layoffs, said a person familiar with the conversations, who spoke on the condition of anonymity because the conversations were private. The company plans to close a small office in Farmington Hills, Mich., a suburb of Detroit, next month.Google said in October that it would slow hiring and “moderate” the growth of its expenses.Jason Henry for The New York TimesProject cancellations and reorganizations have stoked nervousness. In September, Google’s YouTube shut down a project based in the Farmington Hills office with nearly 80 workers, laying off some staff members who did not find new roles at the company, four people familiar with the decision said. YouTube had hired them as contract workers to moderate content on the video platform. Google said 14 workers had lost their jobs..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}What we consider before using anonymous sources. Do the sources know the information? What’s their motivation for telling us? Have they proved reliable in the past? Can we corroborate the information? Even with these questions satisfied, The Times uses anonymous sources as a last resort. The reporter and at least one editor know the identity of the source.Learn more about our process.Google said that through these types of reorganizations, it was not looking to reduce the size of its overall work force, but that some teams might eliminate roles as the company reassessed its priorities.Some teams that consistently grew in the past will be unable to hire more people next year, four people familiar with the situation said. There are also higher demands for 2023 planning, such as a manager’s being asked to draft plans on how to handle 10 different budget scenarios instead of three or four, one person said. In planning discussions, leaders have pressed managers to justify their expenses, asking if there are workarounds or team reorganizations that could save money, two people said.One of the biggest concerns for some employees has been whether Google could use its new performance-evaluation system to accelerate job cuts. In May, the company installed the new system, called Googler Reviews and Development.Under the system, managers expect the bottom 2 percent of employees to be categorized as having “not enough impact,” according to two people familiar with the matter. Another 4 percent should be judged as providing “moderate impact.”Concerns have intensified that the bottom 6 percent, or roughly 11,000 people, could be targeted for dismissal, according to four people, and as earlier reported by the tech news site The Information.The GRAD system means Google now has two categories for employees who are considered low performing, compared with one under the old program, potentially leading to a bigger pool of workers at the bottom. The system has also had a bumpy rollout, with managers and employees confused about how it should work, according to the letter and four employees.Google said it expected workers would become more comfortable with the system over time. It added that it had a no-surprises policy, meaning employees would know well in advance if their performance was falling short.Before handing out the two lowest ratings, managers are also supposed to notify employees in “support check-in” meetings. Google said not every such meeting would lead to a lower rating, with support check-ins also held for those who need extra help to meet their obligations.Employees would also have indications if their manager wanted to put them on a “performance improvement” plan, the company said, a process that compels workers to improve their work within 60 days to keep their jobs. Google has given workers the choice of staying on a performance-improvement plan or resigning with a buyout package.Google said that it had not made changes to increase the number of performance plans, and that it had offered these types of severance options for years.This month’s letter from some of Google’s workers in Switzerland to Fiona Cicconi, the vice president of human resources, was led by members of a 15-person employee representation committee, ER-CH.One of their primary concerns was that contrary to what some Google executives have said, the company may have a quota for the number of employees who were supposed to have support check-ins, and whose jobs might therefore be vulnerable.Google said it had not imposed a quota on support check-ins. But when almost no one used these meetings after the GRAD system was put in place, it said, it asked leaders to convey the importance of the meetings to managers.The memo signatories in Switzerland also said there was confusion, among managers and workers alike, about who qualified for a support check-in. They urged Ms. Cicconi to put guardrails in place so that the system did not lead to mass firings.“It’s normal that new processes don’t run smoothly in the beginning, but this should not happen at the expense of Googlers’ well-being, careers and compensation,” they wrote. More

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    Computer Science Students Face a Shrinking Big Tech Job Market

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    A new reality is setting in for students and recent graduates who spent years honing themselves for careers at the largest tech companies.Ever since she was a 10th grader in Seattle, Annalice Ni wanted to develop software for a prominent tech company like Google. So she went to great lengths to meet the internship and other résumé criteria that make students attractive hires to the biggest tech firms.In high school, Ms. Ni took computer science courses, interned at Microsoft and volunteered as a coding teacher for younger students. She majored in computer science at the University of Washington, earning coveted software engineering internships at Facebook. After graduating from college this year, she moved to Silicon Valley to start her dream job as a software engineer at Meta, Facebook’s parent company.Then last month, Meta laid off more than 11,000 employees — including Ms. Ni.“I did feel very frustrated and disappointed and maybe a bit scared because all of a sudden, I didn’t know what to do,” Ms. Ni, 22, said of her unexpected career setback. “There’s not much I could have done, especially in college, more than I already did, better than I already did.”Over the last decade, the prospect of six-figure starting salaries, perks like free food and the chance to work on apps used by billions led young people to stampede toward computer science — the study of computer programming and processes like algorithms — on college campuses across the United States. The number of undergraduates majoring in the subject more than tripled from 2011 to 2021, to nearly 136,000 students, according to the Computing Research Association, which tracks computing degrees at about 200 universities.Ms. Ni spends her days interviewing for jobs and brushing up on her skills.Jason Henry for The New York TimesTech giants like Facebook, Google and Microsoft encouraged the computing education boom, promoting software jobs to students as a route to lucrative careers and the power to change the world.But now, layoffs, hiring freezes and planned recruiting slowdowns at Meta, Twitter, Alphabet, Amazon, DoorDash, Lyft, Snap and Stripe are sending shock waves through a generation of computer and data science students who spent years honing themselves for careers at the largest tech companies. Tech executives have blamed a faltering global economy for the jobs slowdown.The cutbacks have not only sent recent graduates scrambling to find new jobs but also created uncertainty for college students seeking high-paying summer internships at large consumer tech companies.In the past, tech companies used their internship programs to recruit promising job candidates, extending offers to many students to return as full-time employees after graduation. But this year, those opportunities are shrinking.Amazon, for instance, hired about 18,000 interns this year, paying some computer science students nearly $30,000 for the summer, not including housing stipends. The company is now considering reducing the number of interns for 2023 by more than half, said a person with knowledge of the program who was not authorized to speak publicly.More on Big TechMicrosoft: The company’s $69 billion deal for Activision Blizzard, which rests on winning the approval by 16 governments, has become a test for whether tech giants can buy companies amid a backlash.Apple: Apple’s largest iPhone factory, in the city of Zhengzhou, China, is dealing with a shortage of workers. Now, that plant is getting help from an unlikely source: the Chinese government.Amazon: The company appears set to lay off approximately 10,000 people in corporate and technology jobs, in what would be the largest cuts in the company’s history.Meta: The parent of Facebook said it was laying off more than 11,000 people, or about 13 percent of its work forceBrad Glasser, an Amazon spokesman, said the company was committed to its internship program and the real-word experience that it provided. A Meta spokeswoman referred to a letter to employees from Mark Zuckerberg, the company’s chief executive, announcing the company’s layoffs last month.Hiring plans are also changing at smaller tech firms. Roblox, the popular game platform, said it planned to hire 300 interns for next summer — almost twice as many as this year — and was expecting more than 50,000 applications for those spots. Redfin, which employed 38 interns this summer, said it had canceled the program for next year.There are still good jobs for computing students, and the field is growing. Between 2021 and 2031, employment for software developers and testers is expected to grow 25 percent, amounting to more than 411,000 new jobs, according to projections from the Bureau of Labor Statistics. But many of those jobs are in areas like finance and the automotive industry.“Students are still getting multiple job offers,” said Brent Winkelman, chief of staff for the computer science department at the University of Texas at Austin. “They just may not come from Meta, from Twitter or from Amazon. They’re going to come from places like G.M., Toyota or Lockheed.”College career centers have become sounding boards for anxious students on the cusp of entering the tech job market. In career counselors’ offices, the search for a Plan B has heightened.Some students are applying to lesser-known tech companies. Others are seeking tech jobs outside the industry, with retailers like Walmart or with government agencies and nonprofits. Graduate school is also an option.“This particular class has been a lot more savvy than previous classes,” said Hazel Raja, senior director of the career development office at Pomona College in Claremont, Calif. “Even those who have secured job offers, they’re still making sure they’re networking and staying engaged in campus recruiting opportunities.”Helen Dong, 21, a senior majoring in computer science at Carnegie Mellon University, interned at Meta twice, in 2021 and 2022. So she was surprised at the end of this summer, she said, when she did not receive a job offer from the company. Meta’s recent layoffs prompted her to apply for jobs outside tech, at automotive and financial companies. Last month, she posted videos on TikTok advising her peers to adjust their job expectations.Helen Dong, 21, a senior majoring in computing at Carnegie Mellon University, interned at Meta but did not receive a job offer. Now she is looking in the finance and automotive industries.Helen Dong“I chose to major in computer science so that I could get a ton of offers after college and make bank,” Ms. Dong joked in one TikTok, as she sang along to “Reduce Your Expectations to 0.” In this job market, she wrote at the bottom of the video, “be grateful with 1 offer.”In interviews, 10 college students and recent graduates said they were not prepared for a slowdown in jobs at the largest tech companies. Until recently, those companies were fiercely competing to hire computer science majors at top schools — with some students receiving multiple job offers with six-figure starting salaries and five-digit signing bonuses. An entire genre of TikTok videos had sprung up dedicated to young techies extolling their job perks and their annual compensation, with at least one highlighting a $198,000 package, complete with stock options and relocation expenses.Dozens of people who were recently laid off, or whose tech job offers were rescinded, have posted details of their plights on LinkedIn. To alert recruiters, some have added the hashtag #opentowork to their LinkedIn profile photos.Tony Shi, 23, who majored in computer science and business at Western University in London, Ontario, is one of them. After graduating this year, he began working as a product manager at Lyft in August. In November, the ride-hailing company laid off about 650 employees, including Mr. Shi.Now he is on a tight deadline to find a new job. Mr. Shi is Canadian, from Waterloo, Ontario, and obtained a visa to move to San Francisco for his job at Lyft. Under the visa, he has 60 days to find a new job. He said he had become more sensitive to the businesses and balance sheets of potential employers.“I need to be a little more risk-averse. I definitely don’t want to get laid off again,” he said. Instead of his taking a company for its word, he added, “now, the product needs to make a lot of sense.”Meta rescinded its job offer to Rachel Castellino, 22, weeks before she was scheduled to start work.Jason Henry for The New York TimesSome recent graduates did not get the chance to start their new tech jobs.Rachel Castellino, a statistics major at the California Polytechnic State University, worked to land a job at a major tech company. During college, she interned as a project manager at PayPal, received a data science fellowship funded by the National Science Foundation and founded a data science club at her school.Ms. Castellino, 22, knew she would have to grind to pass companies’ technical interviews, which typically involve solving programming problems. Last year, she spent much of the fall job hunting and preparing for coding assessments. For four days a week, from 8 a.m. to 4 p.m., she studied probability concepts and programming languages. Even so, she said, the interview process was brutal.In November 2021, Meta offered her a job as a data scientist, starting in December 2022. Last month, Meta rescinded the offer, she said.“I worked so hard for those interviews. It felt really good to earn something of a high caliber,” she said. “I had so much to look forward to.”The setback has been disheartening. “I was upset,” Ms. Castellino said. “It wasn’t good to hear.”As for Ms. Ni, she now views losing her dream job as an opportunity to broaden her career horizons. Over the last month, she has applied to midsize tech firms and start-ups that she finds innovative — potential employers she had not previously considered.“I’m exploring opportunities that I didn’t before,” Ms. Ni said. “I feel like I’ve already learned some things.”Karen Weise More

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    Corporate America Has a Message for the Fed About Inflation

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    If the Federal Reserve’s chair, Jerome H. Powell, and his colleagues look at company earnings reports, these themes might catch their eye.Federal Reserve officials are battling the fastest inflation in four decades, and as they do they are parsing a wide variety of data sources to see what might happen next. If they check in on how executives are describing their companies’ latest financial results, they might have reasons to worry.It’s not because the corporate chiefs are overly gloomy about their prospects as the Fed aggressively raises interest rates to control rapid inflation. Quite the opposite: Many executives across a range of industries over the last few weeks have said they expect to see sustained demand. In many cases, they plan to continue raising prices in the months ahead.That is good for investors — the S&P 500 index gained 8 percent last month as companies began reporting quarterly profits — but not necessarily welcome news for the Fed, which has been trying hard to slow consumer spending. The central bank has already raised rates five times this year and is expected to do so again on Wednesday as part of its campaign to cool off the economy. Although companies have warned that the economy may slow and often talk about a tough environment, many are not seeing customers crack yet.“While we are seeing signs of economic slowing, consumers and corporates remain healthy,” Jane Fraser, the chief executive of Citigroup, told investors recently. “So it is all a question of what it takes to truly tame persistently high core inflation.”If companies continue to charge more and consumers are still willing to pay, inflation will be harder to stamp out. That could push the Fed to keep up its push to curb momentum — and if officials must do more to wrestle prices down, it could increase the risk of financial turmoil, higher unemployment or other bad outcomes. Although some companies are reporting a nascent slowdown, the signs are far from conclusive.Demand remains strong despite higher prices.McDonald’s expects to raise prices 10 percent at its restaurants in the United States this year, its leaders said when reporting better-than-expected sales and profits for the third quarter.“I think because of the strength of the brand and the proposition as evidenced by the results, the consumers are willing to tolerate it,” said Chris Kempczinski, the fast-food giant’s chief executive.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Big Tech Is Getting Clobbered on Wall Street. It’s a Good Time for Them.

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    Flush with cash, Facebook, Apple, Amazon, Microsoft and Google are positioned to emerge from a downturn stronger and more powerful. As usual.SAN FRANCISCO — Apple, Amazon, Microsoft and the parent companies of Facebook and Google have lost $2.7 trillion in value so far this year, about the annual gross domestic product of Britain.So what have the companies done about this thrashing on Wall Street? Microsoft has doubled its employees’ bonus pool, Google has committed to hiring more engineers, and Apple has showered its top hardware talent with $200,000 bonuses.The dissonance between the stock market’s relative panic and the business-as-usual calm among tech giants foreshadows a period when analysts, investors and economists predict that the world’s largest companies will widen their lead in their respective markets.The bullishness about their prospects reflects an understanding that the companies have tight control of some of the world’s most lucrative businesses: social media, premium smartphones, e-commerce, cloud computing and search. Their dominance in those arenas and toeholds in other businesses should blunt the pains of inflation, even as those challenges hammer big companies such as Walmart and Target and the stock market nears bear market territory.The S&P 500 spent much of Friday below the threshold for what is considered a bear market — commonly defined as 20 percent below its last peak — before rallying late in the afternoon. The index ended the week with a loss of 3 percent, its seventh straight weekly decline. That’s its longest stretch of losses since 2001.In the months ahead, Microsoft, Google, Apple and Amazon are expected to boost hiring, buy more businesses and emerge on the other side of a bearish economy stronger and more powerful — even if they shed some of their total valuation and their relentless growth of the last few years.“Big tech can say, ‘Forget the economy,’” said Richard Kramer, founder of the London-based advisory firm Arete Research. Flush with cash, he said, “they can invest through the cycle.”Read More About Apple‘After Steve’: Jony Ive, who helped define Apple’s iconic look, left as the Tim Cook era took hold. A new book details how they and the company changed following Steve Jobs’s death.A $3 Trillion Company: Four decades after going public, Apple reached a $1 trillion market value in 2018. Now, the company is worth triple that.Trademarks: The tech behemoth has opposed singer-songwriters, school districts and food blogs for trying to trademark names or logos featuring an apple — and even other fruits.AirTags: Privacy groups said that Apple’s new coin-size devices could be used to track people. Those warnings appear to have been prescient.The large companies’ plans contrast sharply with a wave of spending cuts crashing through the rest of the tech sector. Steep declines in share prices at unprofitable companies such as Uber, down 45 percent, and Peloton, down 58 percent, have led their chief executives to cut jobs or consider layoffs. Start-ups are pruning their workforces as venture capital funding slows.Those companies’ plummeting values will create buying opportunities, said Toni Sacconaghi, a tech analyst at Bernstein, a research firm. Large deals may be difficult because the Federal Trade Commission is scrutinizing takeover moves by Facebook, Apple, Amazon, Microsoft and Google, he said, but smaller deals for emerging technology or engineers could be rampant.As people return to work and travel, they are making fewer Amazon purchases, leaving the company with more space and staff than it needs.Roger Kisby for The New York TimesDuring the Great Recession, Facebook, Amazon, Google, Apple and Microsoft acquired more than 100 companies from 2008 to 2010, according to Refinitiv, a financial data company. Some of those deals have become fundamental to their businesses today, including Apple’s acquisition of the chip company P.A. Semi, which contributed to the company’s development of its new laptop processors, and Google’s acquisition of AdMob, which helped create a mobile advertising business.“The big will get bigger and the poor will get poorer,” said Michael Cusumano, deputy dean of the Sloan School of Management at the Massachusetts Institute of Technology. “That’s the way network effects work.”There are caveats to this sense of invulnerability. The big companies’ plans could always change if the economy continues to deteriorate and consumers pull back even further on their spending. And some of the big companies are more vulnerable than others.Meta Platforms, Facebook’s parent company, has fared worse than its peers because its business is facing long-term challenges. It has posted falling profits as its user growth slows amid rising competition from TikTok, and changes in Apple’s privacy policy stymie its ability to personalize ads.Mark Zuckerberg, Meta’s chief executive, has responded by instituting a temporary hiring freeze for some roles. During a recent all-hands meeting with staff, employees asked if layoffs would follow. Mr. Zuckerberg said that job cuts weren’t in the company’s current plans and were unlikely in the future, according to a spokesman. Instead, he said the company was focused on slowing spending and limiting its growth.Amazon sent a similar signal to its employees last month after it posted disappointing results. In a call with analysts, Brian Olsavsky, the company’s finance chief, said Amazon would look to corral costs after it doubled spending on warehouses and staff to keep pace with pandemic orders. As people return to work and travel, they are making fewer Amazon purchases, leaving the company with more space and staff than it needs.But Amazon’s lucrative cloud business, Amazon Web Services, or A.W.S. for short, continues to gush profits. The company plans to lean into its success in the months ahead by increasing its spending on data centers. It also has committed to raising the cap on base compensation of its corporate staff to $350,000, from $160,000. And it is investing in a plan to build a network of satellites to deliver high-speed internet by launching 38 rockets into space.Between them, Facebook, Microsoft, Google, Apple and Amazon had nearly $300 billion in cash, excluding debt, at the end of March, according to Loup Ventures, an investment firm specializing in tech research.The cash reserves could fund accelerated stock buybacks as share prices fall, analysts say. Doing so would increase the companies’ earnings per share, deliver more value to investors and signal to the market that their firms are more valuable than Wall Street is willing to acknowledge.The companies roared ahead during the pandemic as people sequestered at home immersed themselves in a digital world. Customer orders soared on Amazon, for everything from hand sanitizer to Instant Pots. Shuttered stores shifted sales online and ramped up Google and Facebook advertising. Remote students and employees splurged on new iPhones, iPads and Macs.The last tech giant to cull its ranks during a major downturn, Microsoft, is doing the opposite during this turbulent period. Emboldened by a business that has proved more durable than its peers, Microsoft is sweetening salaries, boosting its investments in cloud computing and standing by a $70 billion acquisition of Activision Blizzard that it expects to unlock more sales for its gaming empire.A Call of Duty event in Minneapolis in 2020. Microsoft’s acquisition of Activision Blizzard is expected to unlock more sales for its gaming empire.Bruce Kluckhohn/USA Today Sports, via ReutersSimilar resilience has been on display at Google and Apple. Google, a subsidiary of Alphabet, recently overhauled its performance review process and told staff that they would likely get pay increases, according to CNBC. It also plans to increase its spending on data centers to support its growing cloud business.Tim Cook, Apple’s chief executive, has a longstanding philosophy that Apple should continue to invest for the future amid a downturn. It more than doubled its staff during the Great Recession and nearly tripled its sales. Lately, it has increased bonuses to some hardware engineers by as much as $200,000, according to Bloomberg.John Chambers, who steered Cisco Systems through multiple downturns as its former chief executive, said the companies’ strong businesses and deep pockets could afford them the chance to take risks that would be impractical for smaller competitors. During the 2008 downturn, he said Cisco allowed distressed automakers to pay for technology services with credit at a time when competitors demanded cash. The company risked having to write down $1 billion in inventory, but emerged from the recession as the dominant provider to a healthy auto industry, he said.“Companies break away during downturns,” Mr. Chambers said.Excelling will require disregarding the broader market’s gloom, said David Yoffie, a professor at Harvard Business School. He said previous downturns had shown that even the strongest businesses were susceptible to profit pressures and prone to pulling back. “Firms get pessimistic like everyone else,” he said.The first test for the biggest companies in tech will be contagion from their peers. Amazon’s shares in the electric vehicle maker Rivian Automotive have plunged more than 65 percent, a $7.6 billion paper loss. Apple’s services sales are likely to be crimped by a slowdown in advertising by app developers, which rely on venture-capital funding to finance their marketing, analysts say. And start-ups are scrutinizing their spending on cloud services, which will likely slow growth for Microsoft Azure and Google Cloud, analysts and cloud executives said.“People are trying to figure out how to spend smartly,” said Sam Ramji, the chief strategy officer at DataStax, a data management company.Regulatory challenges on the horizon could darken the big tech companies’ prospects, as well. Europe’s Digital Markets Act, which is expected to become law soon, is designed to increase the openness of tech platforms. Among other things, it could scuttle the estimated $19 billion that Apple collects from Alphabet to make Google the default search engine on iPhones, a change that Bernstein estimates could erase as much as 3 percent of Apple’s pretax profit.But the companies are expected to challenge the law in court, potentially tying up the legislation for years. The probability it gets bogged down leaves analysts sticking to their consensus: “Big Tech is going to be more powerful. And what’s being done about it? Nothing,” Mr. Kramer of Arete Research said.Jason Karaian contributed reporting. More

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    Hundreds of Google Employees Unionize, Culminating Years of Activism

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    #masthead-section-label, #masthead-bar-one { display: none }Artificial IntelligenceThe Bot That WritesAre These People Real?Algorithms Against SuicideRobots Without BiasAdvertisementContinue reading the main storySupported byContinue reading the main storyHundreds of Google Employees Unionize, Culminating Years of ActivismThe creation of the union, a rarity in Silicon Valley, follows years of increasing outspokenness by Google workers. Executives have struggled to handle the change.Chewy Shaw, an engineer at Google, at a video meeting with other members of the union’s leadership council. He said a union would keep pressure on management.Credit…Damien Maloney for The New York TimesJan. 4, 2021, 6:00 a.m. ETOAKLAND, Calif. — More than 225 Google engineers and other workers have formed a union, the group revealed on Monday, capping years of growing activism at one of the world’s largest companies and presenting a rare beachhead for labor organizers in staunchly anti-union Silicon Valley.The union’s creation is highly unusual for the tech industry, which has long resisted efforts to organize its largely white-collar work force. It follows increasing demands by employees at Google for policy overhauls on pay, harassment and ethics, and is likely to escalate tensions with top leadership.The new union, called the Alphabet Workers Union after Google’s parent company, Alphabet, was organized in secret for the better part of a year and elected its leadership last month. The group is affiliated with the Communications Workers of America, a union that represents workers in telecommunications and media in the United States and Canada.But unlike a traditional union, which demands that an employer come to the bargaining table to agree on a contract, the Alphabet Workers Union is a so-called minority union that represents a fraction of the company’s more than 260,000 full-time employees and contractors. Workers said it was primarily an effort to give structure and longevity to activism at Google, rather than to negotiate for a contract.Chewy Shaw, an engineer at Google in the San Francisco Bay Area and the vice chair of the union’s leadership council, said the union was a necessary tool to sustain pressure on management so that workers could force changes on workplace issues.“Our goals go beyond the workplace questions of, ‘Are people getting paid enough?’ Our issues are going much broader,” he said. “It is a time where a union is an answer to these problems.”In response, Kara Silverstein, Google’s director of people operations, said: “We’ve always worked hard to create a supportive and rewarding workplace for our work force. Of course, our employees have protected labor rights that we support. But as we’ve always done, we’ll continue engaging directly with all our employees.”The new union is the clearest sign of how thoroughly employee activism has swept through Silicon Valley over the past few years. While software engineers and other tech workers largely kept quiet in the past on societal and political issues, employees at Amazon, Salesforce, Pinterest and others have become more vocal on matters like diversity, pay discrimination and sexual harassment.“Our goals go beyond the workplace questions of, ‘Are people getting paid enough?’” Mr. Shaw said.Credit…Damien Maloney for The New York TimesTimnit Gebru, an artificial intelligence researcher, said Google fired her after she criticized biases in A.I. systems.Credit…Cody O’Loughlin for The New York TimesNowhere have those voices been louder than at Google. In 2018, more than 20,000 employees staged a walkout to protest how the company handled sexual harassment. Others have opposed business decisions that they deemed unethical, such as developing artificial intelligence for the Defense Department and providing technology to U.S. Customs and Border Protection.Even so, unions have not previously gained traction in Silicon Valley. Many tech workers shunned them, arguing that labor groups were focused on issues like wages — not a top concern in the high-earning industry — and were not equipped to address their concerns about ethics and the role of technology in society. Labor organizers also found it difficult to corral the tech companies’ huge workforces, which are scattered around the globe.Only a few small union drives have succeeded in tech in the past. Workers at the crowdfunding site Kickstarter and at the app development platform Glitch won union campaigns last year, and a small group of contractors at a Google office in Pittsburgh unionized in 2019. Thousands of employees at an Amazon warehouse in Alabama are also set to vote on a union in the coming months.“There are those who would want you to believe that organizing in the tech industry is completely impossible,” Sara Steffens, C.W.A.’s secretary-treasurer, said of the new Google union. “If you don’t have unions in the tech industry, what does that mean for our country? That’s one reason, from C.W.A.’s point of view, that we see this as a priority.”Veena Dubal, a law professor at the University of California, Hastings College of the Law, said the Google union was a “powerful experiment” because it brought unionization into a major tech company and skirted barriers that have prevented such organizing.“If it grows — which Google will do everything they can to prevent — it could have huge impacts not just for the workers, but for the broader issues that we are all thinking about in terms of tech power in society,” she said.The union is likely to ratchet up tensions between Google engineers, who work on autonomous cars, artificial intelligence and internet search, and the company’s management. Sundar Pichai, Google’s chief executive, and other executives have tried to come to grips with an increasingly activist work force — but have made missteps.Last month, federal officials said Google had wrongly fired two employees who protested its work with immigration authorities in 2019. Timnit Gebru, a Black woman who is a respected artificial intelligence researcher, also said last month that Google fired her after she criticized the company’s approach to minority hiring and the biases built into A.I. systems. Her departure set off a storm of criticism about Google’s treatment of minority employees.“These companies find it a bone in their throat to even have a small group of people who say, ‘We work at Google and have another point of view,’” said Nelson Lichtenstein, the director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara. “Google might well succeed in decimating any organization that comes to the floor.”The Alphabet Workers Union, which represents employees in Silicon Valley and cities like Cambridge, Mass., and Seattle, gives protection and resources to workers who join. Those who opt to become members will contribute 1 percent of their total compensation to the union to fund its efforts.Over the past year, the C.W.A. has pushed to unionize white-collar tech workers. (The NewsGuild, a union that represents New York Times employees, is part of C.W.A.) The drive focused initially on employees at video game companies, who often work grueling hours and face layoffs.In late 2019, C.W.A. organizers began meeting with Google employees to discuss a union drive, workers who attended the meetings said. Some employees were receptive and signed cards to officially join the union last summer. In December, the Alphabet Workers Union held elections to select a seven-person executive council.But several Google employees who had previously organized petitions and protests at the company objected to the C.W.A.’s overtures. They said they declined to join because they worried that the effort had sidelined experienced organizers and played down the risks of organizing as it recruited members.Google employees staged a walkout in 2018 to protest how the company handled sexual harassment.Credit…Bebeto Matthews/Associated PressAmr Gaber, a Google software engineer who helped organize the 2018 walkout, said that C.W.A. officials were dismissive of other labor groups that had supported Google workers during a December 2019 phone call with him and others.“They are more concerned about claiming turf than the needs of the workers who were on the phone call,” Mr. Gaber said. “As a long-term labor organizer and brown man, that’s not the type of union I want to build.”The C.W.A. said it was selected by Google workers to help organize the union and had not elbowed their way in. “It’s really the workers who chose,” Ms. Steffens of C.W.A. said.Traditional unions typically enroll a majority of a work force and petition a state or federal labor board like the National Labor Relations Board to hold an election. If they win the vote, they can bargain with their employer on a contract. A minority union allows employees to organize without first winning a formal vote before the N.L.R.B.The C.W.A. has used this model to organize groups in states where it said labor laws are unfavorable, like the Texas State Employees Union and the United Campus Workers in Tennessee.The structure also gives the union the latitude to include Google contractors, who outnumber full-time workers and who would be excluded from a traditional union. Some Google employees have considered establishing a minority or solidarity union for several years, and ride-hailing drivers have formed similar groups.Although they will not be able to negotiate a contract, the Alphabet Workers Union can use other tactics to pressure Google into changing its policies, labor experts said. Minority unions often turn to public pressure campaigns and lobby legislative or regulatory bodies to influence employers.“We’re going to use every tool that we can to use our collective action to protect people who we think are being discriminated against or retaliated against,” Mr. Shaw said.Members cited the recent N.L.R.B. finding on the firing of two employees and the exit of Ms. Gebru, the prominent researcher, as reasons to broaden its membership and publicly step up its efforts.“Google is making it all the more clear why we need this now,” said Auni Ahsan, a software engineer at Google and an at-large member of the union’s executive council. “Sometimes the boss is the best organizer.”AdvertisementContinue reading the main story More