Amazon founder Jeff Bezos recently warned consumers and businesses that they should consider holding off on major purchases in the coming months as the global economy faces a downturn and could face a recession.
In an exclusive sit-down interview with CNN’s Chloe Melas on Saturday at Bezos’ home in Washington, D.C., the business leader made the case for the faltering economy so far. Strongest recommendation so far.
Bezos urged people to delay spending on big-ticket items like new cars, TVs and appliances, noting that postponing big-ticket purchases is the surest way to preserve some “dry powder” in the event of a prolonged economic downturn. At the same time, Bezos added that small businesses may want to avoid making large capital expenditures or acquisitions during this uncertain time.
If enough consumers heed Bezos’ advice, it could mean lower sales for Amazon, the e-commerce giant that Bezos founded and that accounts for the vast majority of the billionaire’s fortune.
The New York Times reported on Monday that Amazon plans to cut 10,000 jobs, the most in the company’s history. This is in addition to a previously announced freeze on company staffing. The company is second only to Wal-Mart in the number of U.S. employees.
Amazon ( AMZN ) said in October that it expected sales in the final three months of the year to fall well short of Wall Street expectations. The forecast is weaker as rising inflation and fears of a recession weigh on consumer buying decisions as Americans focus more on traveling and eating out rather than buying discretionary goods.
The company’s shares have fallen more than 40% as soaring prices and changing customer behavior weigh on Amazon and the broader tech industry.
Bezos said the possibility of worsening economic conditions makes it prudent to save some cash (if you can).
“Take some risk off the table,” he said. “Just a little risk reduction can make a difference.”
Last month, Bezos issued a warning to his followers on Twitter, advising them to “get ready.” In an interview, Bezos said the recommendations are aimed at business owners and consumers.
He added that many people may be feeling the pinch right now, but argued that, as an optimist, he believes the American dream “is and will be more attainable” — predicting that space travel may be a reality in his lifetime. Widely accepted listing.
Although the U.S. economy is not technically in recession, nearly 75% of likely voters in a recent CNN poll said they feel as though they are already in one. Wages have risen, but not enough to offset inflation, especially high prices for necessities such as food, fuel and shelter. It hasn’t been a good year for those investing in stocks, either, making it especially tough for retirees who make a living from investing.
Other business leaders have issued similar economic messages in recent months. Tesla (TSLA) and Twitter CEO Elon Musk admitted last month that demand for Tesla (TSLA) is “a bit tough,” noting that Europe and China are going through “some sort of recession.” Musk also warned that Tesla (TSLA) will miss its sales growth targets.
JPMorgan Chase & Co. Chief Executive Jamie Dimon spooked stocks in October when he said a recession could hit the U.S. in as little as six to nine months.