Business

Jeff Bezos’ top tips for managing the economic downturn

(CNN) — Amazon founder Jeff Bezos recently warned consumers and businesses that they should consider putting off big purchases in the coming months as the global economy faces a slowdown and possible recession.

The business leader offered his toughest advice yet on a faltering economy in an exclusive interview with CNN’s Chloe Melas on Saturday at Bezos’ home in Washington.

Bezos urged people to put off spending on big-ticket items like new cars, TVs and appliances, noting that delaying big purchases is the surest way to keep some “in reserve” in the event of a prolonged economic downturn. Meanwhile, small businesses may want to avoid making large capital expenditures or acquisitions during this uncertain time, Bezos added.

If enough consumers follow Bezos’s advice, it could mean declining sales at Amazon, the e-commerce giant the billionaire founded and which created the vast majority of the billionaire’s wealth.

The New York Times reported Monday that Amazon plans to cut its workforce, laying off 10,000 workers, the largest number of layoffs in the company’s history. That comes on top of a previously announced hiring freeze on its corporate workforce. The company is second, after Walmart, in terms of the number of people it employs in the United States.

Amazon said in October that it expects sales for the last three months of the year to be significantly below Wall Street expectations. The weaker forecast came as rising inflation and looming recession fears weigh on consumer buying decisions, as Americans focus more on travel and dining out and less on the purchase of discretionary goods.

The company’s shares have fallen more than 40% as rising prices and changing customer behavior weigh on Amazon and the broader tech sector.

Bezos said the likelihood of worsening economic conditions makes it prudent to save some cash if that’s an option.

“Take some risk off the table,” he said. “A minimal reduction in risk could make all the difference.”

Last month, Bezos tweeted a warning to his Twitter followers, recommending that they “batten down the hatches.” The advice was aimed at both business people and consumers, Bezos said in the interview.

Many may be feeling the pinch now, he added, but he argued that, as an optimist, he believes the American dream “is and will be even more achievable in the future,” projecting that within his own lifetime, space travel could be widely accessible to the public.

Although the US economy is not technically in a recession, nearly 75% of likely voters in a recent CNN poll said they felt as if it were. Wages have risen, but not enough to alleviate inflation, especially the high prices of basic necessities such as food, fuel and housing. For those who invest in stocks, it hasn’t been a great year either, and that’s especially hard for retirees who live off their investments.

Other business leaders have issued similar messages about the economy in recent months. Elon Musk, the CEO of Tesla and Twitter, admitted last month that demand for Tesla was “a bit harder” to come by, noting that Europe and China are experiencing a “recession of sorts.” Musk also warned that Tesla will miss its sales growth target.

JPMorgan Chase CEO Jamie Dimon scared the stock market in October by claiming that a recession could hit the United States in as little as six to nine months.

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