Amazon may be the latest big-name business to hand workers their hats.
The New York Times, citing “people with knowledge of the matter,” reported Monday that Amazon could fire about 10,000 employees this week, with cutbacks in divisions overseeing devices, retail and human resources.
Ten thousand workers would represent only about 1% of the e-commerce giant’s global workforce of more than 1.5 million.
But any staff reductions during the all-important holiday season would be seen as a red flag by analysts and shareholders.
To be sure, Amazon would by no means be alone in showing people the door. It was reported Friday that Disney is preparing to impose a hiring freeze and lay off some employees.
Meta, Twitter and other top tech firms have similarly announced layoffs in recent days.
Taken together, the cutbacks, reported and real, suggest a trend in the business world — possibly the next economic shoe to drop as the nation continues grappling with the highest consumer prices in 40 years.
The bigger picture here can be found in recent surveys of business leaders.
These surveys consistently show that most CEOs believe a recession — possibly a nasty one — will arrive next year after months of rate hikes to cool the economy and address inflation.
If so, it’s not hard to speculate that many top managers are getting their fiscal ducks in a row ahead of the next major downturn.
Most large employers are still nursing financial wounds from the pandemic.
In that sense, it’s easy to imagine that CEOs would want to protect shareholder value as much as possible by moving to reduce overhead (read: payrolls) before things get even tougher.
What’s particularly interesting is that the labor market has remained unusually resilient this year, with roughly two openings for every job seeker. This has boosted wages as companies compete for workers.
The prospect of a surge in layoffs, therefore, seems counterintuitive.
That is, until you assume that business leaders have access to economic and financial data and analyses the rest of us lack.
And those analyses undoubtedly anticipate stormy seas until a measure of economic calm returns.
Hence the new mantra of fire first, staff up again later.
I’m not saying we’re all about be tossed aside. But the scope of recent cutbacks by some of the top names in the business world suggests that at least some employers are preparing for the worst.
If you don’t have a rainy-day fund, maybe it’s time to start setting aside some cash.
If employers can plan for trouble, so can the rest of us.
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