A frisson of fear has started to course through the technology sector after the string of layoff announcements from some of the most revered institutions. Meta — the parent of Facebook, Whatsapp and Instagram — sent shockwaves through the industry when it announced that it had decided to lay off 11,000 employees. Amazon has also unveiled plans to shed 10,000 corporate and technology jobs. The dominos have started to fall and, suddenly, the bluster of technobabble-spouting dreamers is not inspiring a great deal of confidence in the durability of the virtual universe. The layoffs signal that a sense of reality has started to bite in the virtual world. Businesses cannot run on bravura alone. Hype and hubris will not endlessly persuade the moneybags to fund eye-popping valuations at loss-making, revenue-crimped operations. The fragility of the internet boom stands exposed at a time when the global economy has started to teeter on the brink of a recession. In a sense, the writing was on the wall almost two years ago when Uber sacked 13% of its global workforce and Ola fired 35% of its employees. But no one chose to read the tea leaves back then. There have always been questions about how fragile the virtual world really is and the businesses it spawns. None of the metrics of performance for physical world companies has ever applied to the fantasy-enveloped unicorns. Along with the technobabble, venture capitalists and private equity investors bought into the new business metrics of daily active users and engagement rates, and in the immersive world of virtual reality something called the gaze-through rate.

A darker truth clouds the scenario for technology titans. This is a hugely disruptive world: rivals can appear on the cloud of whimsy, pretending to be the next bright innovation. In this fickle world, the latest offering will find its fawning aficionados. This can be unsettling for fortune-seeking investors in tomorrow’s graveyard of dreams. Many like Facebook have forked lightning on one bright innovation; once that started to pale, they started to acquire other businesses built on someone else’s idea. Mark Zuckerberg paid $1 billion when he snapped up Instagram in 2012 and $19 billion for WhatsApp in 2014. But there is only so much of a residual life left in any innovative idea. The layoffs are a sign that hard business realities are catching up with virtual destinies.