Tesla CEO Elon Musk announced over the weekend that he had stopped recruiting new employees at his company and intended to cut workforce by 10 percent. In an internal email sent by Musk to company executives, he wrote that he had a "very bad feeling" about the economy. .
Although Tesla is a car manufacturing company, it is considered a technology company that employs quite a few software engineers, and Musk is far from detached from what is happening in the world economy and especially in high-tech.
The sharp declines in the Nasdaq index since the beginning of the year have taken the wind out of the sails of high-tech companies around the world and in Israel as well, and the immediate victims are start-up companies that grew greatly during the Corona period, "dream companies."
The phenomenon of "inflating" the share prices of startups during the corona period affected the entire industry, in a kind of chain reaction.
If a start-up that has not yet proven itself is worth $ 100 million, then the value of old earning companies is also determined according to the new scale.
But since then a lot of water has flowed in the river - interest rates are rising at a rate that is far from gradual, inflation in most developed countries is skyrocketing, and there is a real fear of a recession.
The Nasdaq index has eroded its value by close to 22% since the beginning of the year, and a significant number of technology companies, large and small, have recorded dramatic declines of tens of percent, which means that they were traded a year ago at an inflated market value.
What causes apprehension?
The stock market crisis soon came in professional jargon for the real economy, and technology companies, especially the small ones, began to lay off workers.
In an attempt to deal with the current crisis, many technology companies today are trying to reduce expenses, first and foremost in their workforce.
Large companies in Israel and abroad are slowing down the recruitment process and not recruiting workers in place of those who have left, while the medium and small companies are starting to lay off.
Large institutional bodies talk about small high-tech companies that want to raise money and, in view of the declines in the stock market, are unable to raise money there.
"These companies understand that the market is about to dry up, and they need cash because they are constantly 'burning.'
But the institutional bodies and large funds are no longer happy to invest in these companies - which makes the situation disturbing, because as a result, companies send workers home.
"Everyone is making a stop in the meantime to understand where this market is going, and in the meantime there are startups that continue to 'burn money.' High-tech. Every inexperienced child would receive salaries of tens of thousands of shekels and be promised a luxury car, and we are no longer there. If the big companies did not understand that this is not a temporary event but the beginning of a process, they would not reduce the number of employees That we are going to have a difficult year, "the source in the institutional market adds.
Are there opportunities in the current high-tech crisis?
"As with everything, it is forbidden to pour the baby with water. There are quite a few companies whose share price becomes attractive in view of the declines they have suffered. These are established, old companies, whose shares have also lost height due to the declines in the stock markets.
"Also, in the current situation, good business opportunities have been created for some of the companies. Take, for example, the defense companies, which until recently suffered from a shortage of manpower because engineers and programmers went to startup companies that offered dream pay. Beyond that, big companies can take advantage of the current event. To acquire small start-ups that need money to continue operating. "
Meanwhile, Wall Street stock exchanges closed last Friday in price declines.
The NASDAQ index dropped 2.5%, and Tesla shares lost no less than 9% after the announcement.
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