Continuing the trend from 2022, Big Tech started 2023 with a downsizing. Google on Friday and Spotify on Monday announced plans to lay off about 12,000 and 600 employees, respectively, totaling roughly 6 percent of each company’s workforce. Last week, Microsoft announced 10,000 layoffs, a decrease of less than 5 percent. These companies join a procession technology companies shedding employees: Facebook’s parent company, Targetlaid off 13 percent of its staff—roughly 11,000 employees—last fall, and Amazon is in the midst of eliminating more than 18,000 positions.
These problems go beyond layoffs: tech stock prices have also fallen. In the 12 months leading up to Tuesday morning, Google parent Alphabet shares fell 25 percent, Amazon’s 31 percent, It’s a target 53 percent, i Microsoft’s 16 percent. Moreover, the quarterly revenues of Meta (Facebook’s parent company) amount to shrinkagesuch as Google, YouTube and Microsoft’s. TikTok is keeping up with that overshadow the number of aging Facebook users in 2026.
Big Tech’s wobble suggests that, despite the silly talk of would-be super-regulators like Sen. Amy Klobuchar (D–Minn.), today’s incumbents do not have unlimited control over their markets and are subject to economic forces like any other business. This is consistent with economic and historical data showing that the fortunes of companies, even dominant ones, wax and wane.
In his economic primer, Basics of economy, Thomas Sowell chronicled at length the rise and fall of once-dominant companies in many industries. He further argued that true monopolies are extremely rare—that is, without regulatory protection of the industry.
“In just one year — between 2010 and 2011 — 26 companies fell off the list Wealth 500 companies, including Radio Shack and Levi Struass,” Sowell wrote. “Such processes of change have been going on for centuries and involve changes in entire financial centers. From the 1780s to the 1830s, the financial center of the United States was Chestnut Street in Philadelphia, but in the more than a century and a half since then, New York’s Wall Street has replaced Chestnut Street as the leading financial center in America, and later the City of London as the financial center world.”
Indeed, the US technology sector has historically seen similar disruptions, as well as similar panics over alleged monopolization by dominant companies. For example, in 1998, the year Google was founded, Wealth declared Yahoo wins the “search engine wars”. The article is littered with once-prominent tech companies that are now largely forgotten, including CDNow, Excite, Lycos, and Infoseek. To fight the alleged monopoly of AOL’s instant messenger, competitors lobbied the Federal Communications Commission (FCC) for protection, Wired reported in 2000. In fact, the writers upset that MySpace will forever retain its “natural monopoly.”
Companies fade for many reasons: competition, innovation, economic downturns, leadership failures, etc., etc. Tech columnist Christopher Mims last fall contested the idea that high-profile tech executives are infallible, which he called “the myth of extreme competence.” As evidence, Mims pointed to the failure of the crypto exchange FTX, the steady decline of Facebook and the chaotic management of Twitter by Elon Musk.
“Really, the most obvious expression of this shift in sentiment about America’s biggest tech companies is that they have collectively lost more than $2 trillion in stock market value,” Mims asserted. “Compared to their peaks, this has wiped out more than half of Mr. Musk’s personal fortune and Mr. Zuckerberg.”
In a decade, the technology landscape will no doubt be disrupted, and the market shares of many of today’s giants will shrink or disappear. However, in order to justify their own technocratic aspirations, dragon-seeking politicians often have to settle for fighting paper tigers. Sowell said: “The rarity of true monopolies in the American economy has led to much legalistic creativity to define various firms as monopolistic or as potential or ‘initial’ monopolies.”