Job cuts and falling shares: how did it all go so wrong for the US tech sector?

Also this week, the business software firm Salesforce said it was laying off about 8,000 employees, or 10% of its workforce. Marc Benioff, its chief executive, said the company had overexpanded.

Tech firms laid off more than 150,000 workers globally last year, according to the website Layoffs.fyi. Experts expect more to come after overexpansion and the US and global downturn.

The CEO confidence index, a monthly survey of US bosses, has hit its lowest level since the 2008 financial crisis. According to James Knightley, the chief international economist at the banking group ING, that is a harbinger of job cuts among businesses. Tech firms are already reflecting this.

Apple dipped below its $2tn market capitalisation this week, a year after it became the first ever company to hit a $3tn valuation. Its shares have been hit by lockdown-related disruption to iPhone production in China, its main manufacturing hub, which led to a downgrade of analyst expectations for sales during the lucrative festive period due to a lack of high-end models such as the iPhone 14 Pro.

A weaker consumer environment in China plus increased competition are a problem for Tesla, says Jeffrey Osborne, an analyst at the US financial firm Cowen, but he adds that investors are concerned about elsewhere, too.