Consumer Alert: The tech sector is taking a beating. Is a recession looming?
Amazon announced it plans to lay off more than 18,000 workers, and the online giant is not alone. The tech industry has been hit hard. So the question is this: Will this affect our wallets? The answer is difficult. If these layoffs signal a looming recession, then we’re all potentially impacted. And the tech industry has been deeply affected by this slowing economy. We knew the Amazon layoffs were coming. They started in November when employees in Amazon’s devices and books division were laid off and were told the last day would be November 23rd, according to the Seattle Times.
Then folks in human resources were laid off right before Christmas. And company leaders say that before they’re done, more than 18,000 Amazon employees will be looking for work. And Amazon is not alone.
Check out this list.
- Meta — It’s Facebook’s parent company, and leaders announced in November it’s cutting 13 percent of its workforce.
- Snap – It’s the parent company of Snapchat, and it’s cutting 20 percent.
- Twitter – Elon Musk cut half of its workforce.
- Lyft – Leaders announced the company will cut 13 percent.
- Stripe – It’s a payment processing company. It’s sending 14 percent of its employees pink slips.
- Redfin –..The online real estate platform is cutting 13 percent.
- Salesforce – The software company’s leaders announced it’s laying off 10 percent of its employees. Salesforce is the largest private employer in San Francisco.
Yep. I know. It looks like a recession is right around the corner. But I just read some interesting analysis by Goldman Sachs. Tech jobs account for less than 3 percent of the U.S. labor force. And historically, changes in the tech sector do not predict changes in the larger market.
While analysts with Goldman Sachs and others say layoffs in the tech sector do not indicate a recession, other analysts still fear a recession could be looming. So it doesn’t hurt to be prepared. With the help of News10 NBC Finance Expert and owner of Invessent Jarrett Felton, here’s Deanna’s Do List for preparing for a recession.
- First, analyze your finances
- Pay off your credit card debt.
- Pay yourself first. Have a set amount automatically be deposited into a savings account before you touch the money.
- Be patient. Don’t panic. For example, don’t move money in your retirement account every time the market has a bad day.
- Commit to your plan. If you’ve committed to saving a set amount, don’t make exceptions accept in absolute emergencies.
For more details in preparing for a recession, click here.