The Uncomfortable Truth With Big Tech’s Expense Bloat
In the second half of the 2010s, Big Tech looked unstoppable from a financial perspective. Revenue growth rates were through the roof. The biggest problem found with hiring was finding enough office space. New headquarters were the rage. Under the hood, ambitions knew no limits with most of Big Tech looking well beyond their core competencies for future growth opportunities.
Then the pandemic hit. Instead of putting an end to the growth boon, the pandemic dialed everything up a few notches. With little to nothing to do outside the home, competition for our attention (and cash) plummeted, leading to even stronger revenue growth for Big Tech. The work from home movement then gave management teams a way around office space constraints, leading to even more hiring.
A trend that has begun to materialize over the past two to three earnings cycles in Big Tech is that expense bloat is a genuine problem.
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