The economy worries consumers and investors, and the former have punished tech company stocks in recent weeks by liquidating them.
Consumers are heavily impacted by inflation, which is at its highest level in 40 years. This inflation affects the prices of almost all products and services. It urges caution. Aggressive central bank interest rate hikes to combat these price increases threaten to plunge the economy into recession, say some economists.
But for Jeff Bezos, the U.S. economy is already in recession. The founder of Amazon (AMZN) is well positioned to take the pulse of the economy because the e-commerce giant is a juggernaut that serves consumers and businesses alike.
"Some people say that perhaps we are already in a recession. Do you think that we are in one?" Bezos was asked during an interview with CNN.
"I don’t know whether we’re technically in a recession economists argue over that - they have some technical definitions," Bezos responded. "But I can tell you the economy does not look great right now. Things are slowing down. You’re seeing layoffs in many many many sectors of the economy, people are slowing down."
Then he added: "The probability is we are not in the recession now but we are likely to be in one very soon."
'Take Some Risks Off the Table'
Bezos was then asked what advice he would give small businesses during these difficult times.
"My advice to people, small business owners is take some risks off the table. If you are going to make a purchase maybe slow down that purchase a little bit," the billionaire said. "If you are an individual and you are thinking about buying a new large screen TV maybe slow that down keep that cash, see what happens. Same thing with a refrigerator, a new car whatever, let’s take some risks off the table."
"If you are a small business maybe delay some capital purchases: do you need that new piece of equipment? Maybe it can wait a little bit, have some cash on hands; just a little bit of risk reduction could make the difference for that small business."
When asked how long he thinks the recession would last the entrepreneur said it's "very challenging" to make a prediction but advised people to "hope for the best prepare for the worst."
This advice is similar to the one that Bezos had already given on Oct. 18 with the only difference that for the billionaire there is no longer any doubt that we are in a recession.
"Yep, the probabilities in this economy tell you to batten down the hatches," Bezos posted on Twitter on Oct. 18.
Massive Layoffs
This call for belt-tightening is the recipe from his company. Amazon began Tuesday to carry out massive job cuts to respond to the economic slowdown likely to turn into a recession in the coming months.
The company is expected to cut 10,000 jobs, or about 3% of its corporate workforce, an unprecedented move in its history.
The owner of Whole Foods has begun notifying impacted employees. Based on testimonials and posts on social networks, the reduction in staff affects several divisions, including Alexa and the Luna cloud gaming unit.
"Unfortunately, I was impacted by today's layoff with 10,000 other Amazonians. It is super hard for all of us and I am still trying to navigate through this, while constrained by the timeline of being on a #visa," said Shivani Parate on LinkedIn, who is a former software Development engineer at Amazon. "I am nothing but grateful for the time I have spent at Amazon, learning and collaborating with some of the brightest folks in the industry."
"I am looking for Software/Machine Learning Engineer role immediately. Thank you in advance for any connections, advice or opportunities you can offer! Message me with any leads or reach me at shivani.parate@gmail.com. Thank you again!"
The e-commerce giant is not the only one to carry out massive layoffs to limit the damage of the current economic situation. Meta Platforms announced last week the the elimination of 11,000 jobs, or 13% of the group's 87,000 employees. It was the first cuts in Facebook's history since its creation in 2004.
"In this new environment, we need to become more capital efficient," Meta's CEO Mark Zuckerberg told employees. "We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency."
Downsizing has spread across the tech and crypto sector: Twitter, Lyft, Coinbase, Stripe, Microsoft have all cut jobs recently.
Alphabet, Apple and others have either frozen hiring or are slowing down the pace of hiring.
