Amid mass layoffs and the drubbing of tech stocks in the past year, advertising titan Martin Sorrell still believes that many tech giants could see advertising revenues rebound this year. Sorrell was speaking to CNBC on the sidelines of the World Economic Forum in Davos, Switzerland. Martin Sorrell is the Executive Chairman of the U.K. advertising agency S4 Capita.
According to the report, tech companies have laid off more than 60,000 employees in the past year amid macroeconomic volatility that has seen higher interest rates and rising inflation. Besides, tech companies are also facing rising competition that is squeezing margins.
However, Sorrell believes that Meta Platforms (NASDAQ: META) will “come back extremely strongly this year, on the back of reels and business messenger, to deal with the competition from TikTok and other short-form video competitors.”
Back in November, the social media giant announced layoffs of more than 10,000 employees and a bleak Q4 outlook.
META stock has taken a massive hit in the past year, declining by more than 58% after the company’s expenses ballooned 19% year-over-year to $22.1 billion during the third quarter, mainly due to its investments in the metaverse or augmented reality.
Sorrell is of the opinion that the re-opening of the Chinese economy could benefit technology giants as Chinese businesses expanding internationally are the second-largest source of profits for companies like Meta, Amazon (AMZN), and Alphabet (GOOGL).
The advertising mogul commented, “Google had a solid year last year, and I think they’ll have a strong year this year. Amazon increased its advertising revenues from $31bn to $41bn, and I think [it] will hit $100bn in time, despite what you’re seeing in terms of jobs and hiring.”
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