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Why Jeff Bezos’ tips amid recession fears can trigger sales dip at Amazon?

Amazon boss Jeff Bezos has advised consumers to hold their big purchases this season owing to recession fears. He pointed out that delaying purchases like new cars, televisions and appliances would mean keeping some ‘dry powder’ in the event of a prolonged economic downturn. 

Bezos said, “If you are an individual and you are thinking about buying a large-screen TV, maybe slow that down, keep that cash, and see what happens. Same thing with a refrigerator, a new car, whatever. Just take some risk off the table”.

“Take some risk off the table,” he told CNN. “Just a little bit of risk reduction could make the difference.”

He also advises that small-business owners should also refrain from making fresh investments in new equipment, and build their cash reserves instead.

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

Bezos’s advice could mean a dip in sales for Amazon

The tips come ahead of the holiday season, and if too many people come to follow Bezos’s advice it might trigger a decline in sales for Amazon itself. The company has revealed that it has suffered steep losses in third-quarter 2022 earnings. It said, the company’s operating income decreased to $2.5 billion in Q3 2022 compared to $4.9 billion the same quarter last year, while net income dipped to $2.9 billion versus $3.2 billion during Q3 2021.

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

Amazon CEO Andy Jassy in his first communication in this regard informed that job cuts would continue into 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 Thursday, another CNN report cited. “Those decisions will be shared with impacted employees and organizations early in 2023.”

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


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