Adrian Mühlroth

February 9, 2023, 7:12 pm | Read time: 2 minutes

In an interview with U.S. news channel CNN, Amazon founder Bezos warned against spending money on expensive purchases without careful consideration. The reason is the challenging state of the global economy.

“Batten Down the Hatches”

Experts predict a period of economic downturn and even a possible global recession. Therefore, Bezos advises avoiding major expenses as much as possible in the coming months. He urges consumers to postpone costly purchases such as TVs, refrigerators, and cars for the time being. During a prolonged economic downturn, the money saved could help make ends meet. According to Bezos, small businesses should also delay investments and acquisitions.

Like Germany, the U.S. is “technically” not yet in an economic recession. Nevertheless, the inflation-driven price increases, especially for food, have a similar impact on consumers. In the CNN interview, Bezos said: “Take some risk off the table. Try to reduce some risk in your business or your life.” As early as October, Bezos tweeted about the current economic situation: “Batten down the hatches.”

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Amazon Plans Mass Layoffs

For Amazon, the decreased willingness to spend due to the difficult economic situation means slowed growth. Even before Christmas, the company tried to attract customers to its online stores with significant discounts. However, Amazon also notices that many consumers have to tighten their belts due to the weakening economy and rising inflation. “In the short term, we face an uncertain economy, but we remain quite optimistic about Amazon’s long-term opportunities,” said company CEO Andy Jassy.

CEO Jassy is addressing the margin pressure with a combination of cost savings and price increases. An insider told the news agency Reuters in the fall of 2022 that Amazon planned to lay off about 10,000 employees. In early January, Jassy officially increased this number to 18,000. This makes the wave of layoffs significantly larger than expected, as this number represents more than three percent of the U.S. workforce. It would even be the largest wave of layoffs in the company’s history. After Walmart, Amazon employs the most workers in the U.S. Currently, there are no known plans for similar actions at Amazon Germany.

Source

• CNN Edition: Hold off on big purchases like TVs, Jeff Bezos warns

With material from Reuters