Amazon founder Jeff Bezos recently warned consumers and businesses that they should consider postponing major purchases in the coming months as the global economy faces a slowdown and faces a possible recession. .
The business leader offered his strongest 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 postpone spending on big-ticket items such as new cars, TVs and appliances, noting that delaying big purchases is the surest way to conserve ‘dry powder’ in the event of a downturn. prolonged economy. Meanwhile, smaller companies may want to avoid making big 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 on Monday that Amazon plans to cut its workforce, laying off 10,000 workers, the biggest reduction in the company’s history. This is in addition to the previously announced hiring freeze on its 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 expected sales for the last three months of the year to be significantly below Wall Street expectations. The weaker forecast came as rising inflation and looming recession fears weigh on consumer buying decisions, with Americans focusing more on travel and dining and less on buying discretionary goods. .
Shares of the company fell more than 40%, with soaring prices and changing customer behavior weighing on Amazon and the wider tech industry.
Bezos said the likelihood of worsening economic conditions makes it prudent to save money if that’s an option.
“Take some risks off the table,” he said. “Just a little risk reduction could make a difference.”
Last month, Bezos tweeted a warning to his Twitter followers, advising them to “batten down the hatches”. The advice was aimed at business owners and consumers, Bezos said in the interview.
Many may be feeling the pinch now, he added, but argued that as an optimist he believes the American dream “is and will be even more achievable in the future” – projecting that from in his lifetime, space travel could become widely available to the public.
Although the US economy is not, technically, in a recession, nearly 75% of likely voters in a recent CNN poll said they felt it was. Wages are rising, but not enough to dampen inflation, including high prices for basic necessities like food, fuel and housing. For those who invest in equities, it has not been a good year either, and it is particularly difficult 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 Tesla’s (TSLA) request was “a bit more difficult” to obtain, and noted that Europe and China are experiencing a “sort of recession”. Musk also warned that Tesla (TSLA) would miss its sales growth target.
In October, JPMorgan Chase CEO Jamie Dimon spooked the stock market by saying a recession could hit the United States within six to nine months.