For people who are not sure what Brexit means, it refers to the British public’s choice on June 24 to vote to leave the European Union. Given the sheer extent to which Britain is reliant on its connections with the European Union, it should come as no surprise to learn that this has had a horrendous impact on Britain, which in turn, has sent shockwaves rippling throughout the economies of the rest of the world. (1)
In part, this is because membership in the European Union came with a shared set of standards, and in part, this is because membership in the European Union came with open borders that facilitated international trade by permitting free movement of labor and free movement of products. This has hit Britain particularly hard because a lot of multinational corporations from English-speaking countries chose it as the site for their European offices because of the ease of communication that came with convenient access to the rest of the members of the European Union.
However, it is also important to mention the fact that no one know what will happen next with Britain. This is because Brexit was not a binding referendum, meaning that the Britain’s leadership can refuse to submit the request to leave the European Union even if it comes at the expense of their popular support. For that matter, no one is even sure who will make up Britain’s leadership, seeing as how the chances of a general election are good while the current prime minister, David Cameron has announced his eventual plan to step down out of a shame at having lost a referendum he had called and intended to win in order to shore up his support among his Tories.
Even worse, some people are even expecting a potential breakup of the United Kingdom because of the rumblings heard throughout pro-Remain region, with Scotland rumbling the loudest because one of the reasons that the Scots had voted to remain with the United Kingdom was because they would have had to jump through a lot of hoops in order to stay within the European Union as an independent country.
Summed up, Brexit has caused a horrible mess that has splattered not just Britain, not just the other countries of the European Union, but also countries all around the world because of the interconnected nature of modern economies. Even worse, there is no end in sight to this horrible mess because its numerous uncertainties will not be cleared up anytime soon, meaning that until consumers, businesses, and other institutions can anticipate the future once again, there will no end to the protective measures that they are already using to shield themselves from Brexit’s impact. Protective measures that have a real chance of causing another wave of recessions like the housing crisis that kickstarted the Great Recession of the late 2000s.
Here are five examples of the tech companies that Brexit is going to hit the hardest:
Amazon is an excellent example of the companies feeling the effects now that the British public has voted to leave the European Union. After all, it has used Britain as a shipping hub for its European operations, which has now been made uncertain. If Britain leaves the European Union, there is a chance that Amazon will no longer be able to ship its packages from Britain to the other countries in the European Union with the same ease, meaning that Amazon will have to reduce its British operations as part of the reorientation of its internal distribution network. This is without factoring in the real chance that the European Union will move as a whole to retaliate against Britain, which is possible because Britain has not just spat in their faces but also caused real economic harm to them by leaving. (2)
Microsoft is a tech titan whose stock is tumbling because of Brexit, though its situation is not as bad as that of Amazon. In main, this is because Microsoft does business worldwide, meaning that a major disruption of the existing system is in turn, a major disruption to the business conditions that make those worldwide operations possible. This is the reason that Microsoft was actually one of the corporations encouraging the British public to remain within the European Union before the vote, though unfortunately, it was not successful in that regard. (2)
IBM is another example of a tech titan that is suffering because of Brexit for much the same reason as Microsoft. After all, it conducts business throughout the European Union, which includes Britain but with the new uncertainties in its business environment, this is now under threat like never before. No wonder that IBM was also one of the companies that had advocated for Britain to remain within the European Union. (2)
Google is also feeling the effects of Brexit now that no one knows what will be happening with either the British market or the European markets. This can be seen in how Google’s stock saw a significant fall on the day after Brexit, though it remains to be seen whether it will suffer further effects as the consequences of Brexit continue to spread throughout economies all around the world. (2)
Virgin Media is an excellent example of the British tech companies that will be hit by Brexit. In short, it is a telecommunications business, meaning that its customers will fall in number as Brexit causes both British businesses and British consumers to scale back on their use of the Internet, mobile phones, and everything else provided by Virgin Media. Even worse, Virgin Media is reliant on European labor because British labor cannot meet all of the needs of British tech companies, meaning that it has a lot of HR problems on its hands. (3.
Summed up, Brexit is going to hit tech companies hard, so much so that a lot of them have been speculating about potential moves to Ireland, which has English as its predominant language but is remaining within the European Union. Unfortunately, the sheer confusion over the mess makes it difficult to speculate anything more about what will happen, which is a large part of the problem in the first place.