"'Corona Safe Zone' Even ICT Companies Feel Fear... 'Q2 Even More Risky'"

[Asia Economy Reporter Seulgina Jo] "There is no safe zone." As the novel coronavirus infection (COVID-19) crisis prolongs, even the global ICT giants, once considered immune zones, are becoming deeply concerned. Following the hiring freeze by the world's largest search engine Google, so-called beneficiaries of the 'stay-at-home era,' such as online video service (OTT) companies, are also expressing concerns about future prospects one after another.

According to related industries on the 27th, the employment market shock caused by COVID-19 is spreading beyond travel and entertainment sectors to IT and others. Job search website Glassdoor reported that since the COVID-19 pandemic fully began in March, job postings for IT positions in the U.S. have decreased by nearly 20%.

Although this is a smaller decline compared to the severely hit travel (-73%) and entertainment (-46%) sectors, it shows that the economic impact is increasingly affecting all industries regardless of sector. Daniel Zhao, Glassdoor's chief economist, expressed concern, saying, "There is no industry immune to COVID-19."

Global companies such as Google and Netflix expect the situation to worsen significantly after the second quarter. Google, which is about to announce its earnings this week, has already withdrawn some investment plans and decided to cut its second-half budget by about half, mainly in the marketing department, and freeze new hiring. CNBC reported that this is a measure taken in response to the economic headwinds caused by the COVID-19 pandemic.

OTT giants, considered beneficiaries of COVID-19, are warning that growth will sharply slow down after the third quarter. Disney's streaming platform Disney+ achieved a remarkable milestone earlier this month, surpassing 50 million global subscribers just five months after its launch, but Disney’s core industries have been devastated, hampering progress. Due to successive filming and production halts, the airing of original content has been delayed one after another, and additional content investment has become difficult. The expected launch in Korea, originally scheduled for early next year, is likely to be postponed.

Netflix, the leading OTT platform that posted first-quarter results exceeding Wall Street expectations, recently judged the subscriber growth trend as "temporary." It also believes that the strong U.S. dollar may have a negative impact on global revenue. Netflix, too, will inevitably face difficulties securing original content currently halted in production if the COVID-19 crisis continues. Meanwhile, video conferencing platform Zoom is currently caught in backlash due to growing concerns over cybersecurity and privacy amid its rapid growth.

ICT companies such as AT&T and Verizon are also withdrawing their 2020 earnings forecasts citing uncertainty. AT&T CEO Randall Stephenson said at the first-quarter earnings announcement, "It is difficult to accurately predict the COVID-19 pandemic and its resulting economic impact." Swedish telecom operator Tele2 has withdrawn its earnings forecast and suspended the special dividend payment scheduled for next month.

This content was produced with the assistance of AI translation services.