Tech Giants Plan for Shopping Spree
As the economic shutdown and its aftermath persist, well-heeled tech companies are shopping for smaller, struggling enterprises.
The giants will use the opportunity to expand into new markets, fill gaps in product lines, or quash competition, analysts say.
On 19 May, Microsoft announced its purchase of Softmotive, a robotics company specializing in automating routine office tasks, an ability more companies are likely to seek to survive with a smaller budget and smaller workforce.
Uber Technologies is in talks to buy food delivery service Grubhub, which saw its business surge as the shutdown began but since has fallen off. The acquisition would grow Uber Eats, the ride-hailing company’s own delivery service, and outpace competitor DoorDash.
Large mergers and acquisitions have ground to a halt during the economic shutdown and are unlikely to resume at previous paces while the future remains uncertain. Instead, large companies will use their cash to buy smaller, more specialized businesses.
Tech Employment Picture Darkens
Uber has laid off 6,700 since February and its competitor Lyft has announced plans to cut 17 percent of its workforce. Airbnb has trimmed its staff by 25 percent.
Those cuts, amounting to more than 10,000 workers, as well as layoffs among start-ups and smaller companies, have rattled the tech industry, where waiting jobs have often outnumbered qualified workers.
Both Google and Microsoft have slowed hiring in several programs and divisions.
The U.S. information technology industry has erased 112,000 jobs in April, virtually wiping out all those added last year, according to U.S. labor department statistics. In San Francisco, a major U.S. tech center, about 118,000 are jobless, according to the San Francisco Chronicle.
