Jeff Bezos' warns of global recession; tells consumers to avoid unnecessary spending

Amid global economic challenges, Amazon founder Jeff Bezos has asked consumers to avoid unnecessary spending and “hold onto the money”, while warning about the looming global recession. His statement comes at a time when big technology firms are cutting jobs across the world and the central banks globally are hiking interest rates to curtail inflation. 

In an interview on Sunday, the Amazon founder said: “Take some risk off the table. Keep some dry powder on hand. Just a little bit of risk reduction could make the difference for that small business if we do get into even more serious economic problems. You've got to play the probabilities a little bit." 

“If you're an individual considering purchasing a big-screen TV, you might want to wait, hold onto your money, and see what transpires. The same is true with a new automobile, refrigerator, or whatever else. Just remove some risk from the equation,” he added. 

This is not the first time Bezos has warned about recession. Last week, the Amazon founder said the state of the economy does not look good and hence layoffs are taking place across sectors. “The economy does not look great right now. Things are slowing down, you’re seeing layoffs in many, many sectors of the economy. The probabilities say if we're not in a recession right now, we're likely to be in one very soon,” he said. 

The e-commerce giant last week announced layoffs across its devices and books businesses. According to reports, the company is planning to cut as many as 10,000 jobs or 3% of its corporate workforce to manage its crippling finances. The layoffs are touted to be the biggest in the company’s corporate history.  

Andy Jassy, the chief executive officer of Amazon in a note to employees said, “Leaders across the company are working with their teams and looking at their workforce levels, investments they want to make in the future, and prioritizing what matters most to customers and the long-term health of our businesses.”

“We haven't concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organisations), but each leader will communicate to their respective teams when we have the details nailed down,” he added. Meanwhile, the Seattle-based e-commerce firm, which doubled its workforce in the two years of the Covid-19 pandemic, has also decided to freeze hiring.

According to the data tracked by Layoffs.fyi, a website that tracks layoffs, as many as 1,36,989 employees have been laid off this year so far, by 849 companies globally. Earlier this month, the social media company Meta sacked 11,000 employees or 13% of its workforce. Social media platform Twitter, which was recently acquired by Tesla CEO Elon Musk, sacked 50% of its workforce. In October, software major Microsoft fired 1,000 employees, or 1% of its workforce, in the third round of downsizing. Snap, the parent company of the social media platform Snapchat, sacked 20% of its workforce to restructure its business.