Washington
CNN Business
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Amazon founder Jeff Bezos recently warned consumers and businesses that they should consider putting off big purchases in the coming months as the global economy faces a downturn and faces a potential downturn.
The business leader offered his clearest advice yet on a faltering economy in an exclusive interview with CNN’s Chloe Melas on Saturday at Bezos’ home in Washington, DC.
Bezos urged people to put off spending on big-ticket items like new cars, TVs and appliances, noting that delaying big purchases is the surest way to keep some “dry powder” in the event of a prolonged economic downturn. Meanwhile, small businesses may want to avoid making large capital expenditures or acquisitions during this uncertain time, Bezos added.
If enough consumers follow Bezos’ advice, it could mean lower sales for Amazon, the e-commerce giant Bezos founded and which created the vast majority of the billionaire’s wealth.
The New York Times reported Monday that Amazon plans to cut its workforce, laying off 10,000 workers, the biggest reduction in the company’s history. That’s on top of a previously announced hiring freeze on its corporate workforce. The company is second only to Walmart in the number of people it employs in the United States.
Amazon (AMZN) said in October that it expects sales for the final three months of the year to be significantly below Wall Street expectations. The weaker forecast came as rising inflation and fears of a looming recession weigh on consumer buying decisions, as Americans focus more on traveling and dining out and less on buying discretionary goods.
The company’s shares have fallen more than 40% as rising prices and changing customer behavior weigh on Amazon and the broader tech sector.
Bezos said the likelihood of worsening economic conditions makes it prudent to save some cash if that’s an option.
“It takes a little bit of risk off the table,” he said. “Just a little bit of risk reduction could make a difference.”
Last month, Bezos tweeted a warning to his Twitter followers, recommending that they “batten down the hatches.” The advice was intended for both business owners and consumers, Bezos said in the interview.
Many may be feeling the pinch now, he added, but he argued that, as an optimist, he believes the American Dream “is and will be even more achievable in the future,” projecting that within his own lifetime, space travel could become widely accessible. for the world. public.
Although the US economy is not technically in a recession, nearly 75% of likely voters in a recent CNN poll said they feel it is. Wages have risen, but not enough to ease inflation, especially high prices for necessities like food, fuel and housing. For those who invested in stocks, it hasn’t been a great year either, and that’s especially hard for retirees who live off their investments.
Other business leaders have issued similar messages about the economy in recent months. Tesla (TSLA) and Twitter CEO Elon Musk admitted last month that the Tesla (TSLA) lawsuit was “a bit harder” to come by, noting that Europe and China are experiencing a “recession of sorts.” Musk also warned that Tesla (TSLA) would miss its sales growth target.
JPMorgan Chase CEO Jamie Dimon scared the stock market in October by saying the United States could hit a recession in as little as six to nine months.
Source: news.google.com