Why Jeff Bezos’ Advice Amid Recession Fears May Trigger Lower Sales At Amazon

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Amazon boss Jeff Bezos has advised consumers to hold off on big purchases this season due to recession fears. He pointed out that delaying purchases like new cars, TVs and appliances would be like holding on to “dry powder” in the event of a prolonged economic downturn.

Bezos said: “If you’re an individual and you’re thinking of buying a big screen TV, maybe slow it down, save that money and see what happens. Same with a fridge, a new car, little matter. Just take a few risks off the table.”

“Take a little risk off the table,” he said CNN. “Just a little risk reduction could make a difference.”

He also advises small business owners to refrain from making new investments in new equipment and instead build up their cash reserves.

Many may be feeling the pinch now, he said, adding that things would be better in the future.

Bezos’ advice could mean lower sales for Amazon

The advice comes ahead of the holiday season, and if too many people follow Bezos’ advice, it could trigger a sales slump for Amazon itself. The company disclosed that it suffered heavy losses during the third quarter of 2022. It said the company’s operating profit decreased to $2.5 billion in the third quarter of 2022 from $4.9 billion. in the same quarter last year, while net profit fell to $2.9 billion from $3.2 billion in the third quarter of 2021.

Apart from that, Amazon confirmed on Wednesday that it started its termination process after New York Times first cited that the company planned to lay off 10,000 workers, the largest reduction in its history.

Amazon CEO Andy Jassy, ​​in his first communication in this regard, advised that the job cuts would continue early next year.

“Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments,” Jassy wrote in a letter to staff on Thursday. , another CNN quoted report. “These decisions will be shared with affected employees and organizations in early 2023.”

Several companies, including Tesla, have already started talking about recession fears. JPMorgan Chase CEO Jamie Dimon predicted last month that a recession could hit the United States within six to nine months.

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