In context: We’re just over one week away from Black Friday and Cyber Monday, which means retailers are getting ready to start (or have already started) their discount sales. Amazon sees billions of dollars worth of purchases over this period, so it’s somewhat surprising to hear the company’s founder and Chief Executive, Jeff Bezos, advising people to be frugal.
In an interview with CNN this week (via The Telegraph), Bezos was asked if he thought consumers should “batten down the hatches” in response to the global economic downturn. “My advice to people is take some risk off the table,” Bezos said. “If you’re an individual and you’re thinking about buying a new large-screen TV, maybe slow that down. Keep that cash, see what happens. Same thing with a refrigerator or a new car, or whatever.”
Given the spiraling inflation, rising energy costs, and constant reports of companies laying off thousands of staff, it’s easy to see Bezos’ point. But not everyone might appreciate being told to spend less money by the fourth-richest person in the world, who has a fortune of $120 billion—though he does plan to give most of it away.
Many shoppers are already tightening their purse strings as the cost of living rises. Combined with the post-lockdown hangover, reluctance to splash out on expensive, unnecessary purchases has impacted the phone and PC/hardware industries, among others.
With the sales events and holidays, the fourth quarter is Amazon’s biggest, but the company has lowered expectations for Q4 to between $140 billion and $148 billion—much less than analysts expected $155 billion—representing growth of around 2 to 8%. Amazon saw 9% growth during last year’s fourth quarter.
Amazon is also tightening its belt. In addition to business-wide cost-cutting exercises implemented by CEO Andy Jassy, the company is planning to lay off 10,000 office staff. That’s slightly less than the 11,000 staff Meta is letting go, but more than the 3,700 Twitter is losing. Lyft, Microsoft, Snap, Tesla, and Robinhood are just some of the other tech firms reducing their headcount this year.
The flip side to the argument, of course, is that if you’re determined to buy a new TV, graphics card, laptop, or whatever, purchasing it at a discount during the sales makes more sense than spending more at a later date. Just don’t tell Jeff.