Jeff Bezos, the founder of Amazon.com Inc, said on Saturday that consumers and business entities should try to avoid spending too much on purchases that can be postponed, as chances of a recession are increasing around the globe. Jeff Bezos, who is the fourth-wealthiest person in the world, made the statement while talking with CNN.
As the holiday season is approaching in the United States, people tend to spend more on purchasing expensive items such as cars and TVs. According to Jeff Bezos, families in America should try to save cash and avoid unnecessary spending in the coming months as the United States might fall into a recession soon.
“Take some risk off the table,” Mr. Bezos advised people, adding, “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.”
Jeff Bezos also said that the economic condition is not looking good at the moment. As companies are trying to cut costs and reduce unnecessary expenses, we can expect more lay-offs and cost-cutting measures in the future also. According to him, the economy is slowing down as spending is slowing down. This will eventually lead to an economic recession.
The economic condition has been getting worse around the world as higher inflation rates are forcing central banks to follow an aggressive interest rate hikes policy. Higher interest rates are reducing cash flow in the economy which is resulting in lesser spending by consumers and businesses. Various business entities are already facing financial crises due to large-scale reductions in revenue and income.
Amazon which was founded by Jeff Bezos in 1994 decided to lay off more than 10000 employees a few days ago as the company is trying to cut costs. The e-commerce giant also decided to implement a hiring freeze in various departments.
Almost all tech companies are implementing such cost-cutting measures to get through high volatility in macroeconomic conditions.
The revenue and income of Amazon going down every quarter for the last few months as revenue from advertisements has fallen sharply. Reduction in sales through the eCommerce platform also has deeply impacted the financials of the company.
High inflation in European states has forced consumers in those countries to reduce spending on online retail stores such as Amazon.