Amazon, one of the first companies to join the prestigious $1 trillion club, just passed another, albeit less desirable, milestone. Jeff Bezos’ brainchild this week became the first public company to lose $1 trillion in market capitalization, reports Gizmodo.
Staggering figures, for the first time marked by Bloomberg, is the result of a deteriorating economy, repeated disappointing earnings reports and a massive selloff in stocks. Amazon, which was valued at $1.882 trillion on June 21, reported a much smaller valuation of $878 billion on Thursday.
Microsoft, which last year briefly overtook Apple as the world’s most valuable company, lost about $900 billion in market value. Combined, the decline in the value of these two companies shows the effect of a bad year that most in the tech sector would rather forget.
The price cuts aren’t limited to Amazon and Microsoft. The five most valuable American technology companies lost a combined $4 trillion this year. In comparison, this is more than the combined GDP of Turkey, Argentina and Switzerland.
Amazon, in particular, disappointed investors last month with third-quarter earnings that fell short of expectations. Moreover, the company said that in the fourth quarter it expects annual growth of only 2-8%. Like many other companies, Amazon has also had to deal with a decline in e-commerce purchases as consumers begin to return to retail stores.
“Obviously, there’s a lot going on in the macroeconomic environment,” CEO Andy Jassy said after reporting third-quarter earnings. “And we will balance our investments to be more rational without jeopardizing our key long-term, strategic bets.”
At the same time, Amazon has so far managed to avoid the mass layoffs that have affected many American companies in the technology industry. This does not mean that there is no cause for concern. Earlier this month, the company decided to expand a previously implemented hiring freeze to cover all of its corporate employees. In the official note Amazon’s senior vice president of human resources and technology, Beth Galetti, called the uncertainty of the economic outlook and the growth of the number of employed workers in recent years the main factors behind the slowdown in growth.
Just four years ago, Apple became the first company to reach $1 trillion in capitalization. Over the years, Apple somehow managed to briefly triple that estimate, and about a dozen other companies, including Amazon, Microsoft, Meta, and Saudi Aramco, managed to surpass the once-unattainable number.