Increasingly Healthy Economy Isn’t Helping Tech Vendors

Lowered revenue forecasts from Cisco and Palo Alto Networks, as well as continued layoffs, reflect that customers remain conservative in their tech spending.
By Larry Walsh

Concerns of an impending recession are fading fast. Inflation is easing, the prospect of interest rate cuts is growing more likely, and unemployment rates remain low. This paints a picture of an economy that’s not only robust but gaining momentum.

According to the economic think tank The Conference Board, 80% of U.S. CEOs expect a shallow recession in 2024; 29% expect conditions to improve, and 17% expect no recession in the near term. The growing optimism is a reversal from a year ago, when most CEOs were bracing for an economic downturn.

Yet a curious trend is emerging in the IT sector. Companies are tightening their belts, as evidenced by job cuts and budget reductions. At the crux of this contradict...