Last week we asked whether the biggest US tech companies have gotten flabby. Our argument was that the recent job cut announcements at Amazon, Alphabet, Microsoft, Meta and Salesforce were less about reversing pandemic-era over-hiring (as the companies assert) and more about falling stock prices and keeping restive investors at bay. Big tech share prices are down between a third and two-thirds from their 2021 peaks, and activist investors are pounding their drums menacingly at Salesforce, Meta and Alphabet.

Determining whether the average company has lost focus on costs and returns is not all that complex: you start by benchmarking margins and returns against peers. If the operating margin at toothpaste company A is 12 per cent, and at toothpaste company B it’s 16 per cent, company A has some explaining to do. There may be extenuating factors, but they’d better be demonstrable.

This procedure does not work very well with the very big techs, for two reasons. One, these companies are to a greater or lesser degree unique. There are no very useful comparator companies for Google, Meta or Amazon’s retail business. There are companies that do similar things, but they’re orders of magnitude smaller. For Microsoft and Salesforce, there are other very large enterprise software companies, making comparisons a little easier, but still, business models, markets and delivery technologies differ.