Fears of a worldwide recession are growing as consumers and businesses make budget cuts in response to rising prices and interest rates.
It represented the US company’s poorest quarterly growth outside the pandemic’s beginning in nearly ten years.
Microsoft reported a decline in demand for its technology, including PCs.
Sales increased 11% to $50.1 billion; the smallest revenue rise in the previous five years.
American companies have also been harmed by a high US currency, which has increased the cost of exporting goods.
Alphabet’s profits fell by over 30% to $13.9 billion in the quarter as YouTube ad revenues fell for the first time since the company started disclosing them to the public.
The company’s sales growth has decreased for five straight quarters.
Sundar Pichari, Alphabet’s boss, stated that the company was “sharpening” its emphasis and “responding to the economic climate.”
“This disappointing quarter for Google signifies hard times ahead if market conditions continue to deteriorate.” — Evelyn Mitchell
Microsoft predicted that as business clients make cuts, demand for its PC and cloud computing technology would continue to decline this year.
The Xbox video game division’s sales have also declined.
As customers and workers became increasingly dependent on their technology due to the pandemic, big IT companies saw a rise in sales. But given the current environment, the sector’s prospects seem grimmer.
In recent months, Microsoft eliminated employees while Alphabet claimed it was limiting hiring.
Many internet firms have decided to reduce employee numbers, such as Netflix and Twitter, or to slow the hiring process, such as the social media site Snap.
In Tuesday’s after-hours trade, shares of Microsoft and Alphabet both dropped significantly.
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