Amazon founder Jeff Bezos recently warned consumers and businesses that they should consider postponing major purchases in the coming months as the global economy struggles with a recession and faces a possible recession.
Business leader Bezos’s Washington, D.C. In an exclusive sit-down interview with CNN’s Chloe Melas on Saturday at the House, she offered her blunt advice on the sagging economy.
Bezos urged people to put off spending on big-ticket items like new cars, televisions and appliances, saying the surest way to keep some “dry powder” during a prolonged economic downturn is to delay big purchases. Meanwhile, small businesses may want to avoid large capital expenditures or acquisitions during this uncertain time, Bezos added.
If enough consumers follow Bezos’s advice, it could mean fewer sales for Amazon, the e-commerce company Bezos founded and which generated most of the billionaire’s fortune.
The New York Times reported Monday that Amazon plans to cut its workforce, laying off 10,000 workers, the largest cut in the company’s history. This is in addition to the previously announced hiring freeze in its corporate workforce. The company is second only to Walmart in the number of people employed in the United States.
Amazon ( AMZN ) said in October that it expects sales for the final three months of the year to come in significantly below Wall Street’s expectations. The weaker forecast came as rising inflation and fears of a recession weighed on consumer purchasing decisions as Americans focused more on travel and dining and less on discretionary purchases.
The company’s shares have plunged more than 40% as bullish prices and changing customer behavior hit Amazon and the broader tech sector.
Bezos said it’s prudent to save some cash if the likelihood of worsening economic conditions is an option.
“Take some risk off the table,” he said. “A little bit of risk reduction can make a difference.”
Last month, Bezos tweeted a warning to his followers on Twitter, suggesting they “get the hatches down.” The advice was for business owners and consumers alike, Bezos said in the interview.
Many are feeling the pinch now, but as an optimist he argued that the American dream was “more attainable in the future”—he argued that in his own lifetime, space travel would be widely accessible. General
Although the U.S. economy is not technically in a recession, a recent CNN poll found nearly 75% of voters say they are. Wages have risen, but not enough to moderate inflation, especially the higher cost of essentials such as food, fuel and shelter. For those investing in stocks, it hasn’t been a great year, and it’s been particularly tough for retirees living off their investments.
Other business leaders have issued similar messages about the economy in recent months. Tesla ( DSLA ) and Twitter CEO Elon Musk acknowledged last month that demand for Tesla ( DSLA ) is “a little tougher” to come by and noted that Europe and China are experiencing “kind of a slowdown.” Musk also warned that Tesla ( TSLA ) will fall short of its sales growth target.
JPMorgan Chase CEO Jamie Dimon spooked the stock market in October.