Signs of recession?
Article in New York Times newspaper details how low interest rates were fueling growth, but now the “easy money” days are gone.
- “The whole tech industry of the last 15 years was built by cheap money. Now they are getting hit by a new reality, and they will pay the price
- Carvana, the online used car retailer, was worth $80 billion eighteen months ago, but is now value at less than $1.5 billion
- Value plunged 98%
- Did a round of layoffs in May and another in November
- SalesForce bought Slack (office communication tools) for $28 billion
- Borrowed $10 billion to complete transaction
- Now it is cutting 8,000 employees, many of them at Slack
- Zillow, real estate firm, had $45 billion valuation in 2019
- Now shrunk to $10 billion
- Went from 8,000 employees to 5,500 employees
- Study published by National Association for Business Economics
- More businesses expect staffing reduction at their companies in the coming months
- 33% say firm is fully staffed
- 19% will be laying off staff in next 90 days
- “widespread concern about entering a recession this year”
- “fewer respondents than in recent years expect their firms’ capital spending to increase in the same period”
- 40% say their companies’ margins have declined during past 90 days
- Expect to pay higher wages for the workers they are holding on to
- The Register newspaper is reporting that IBM is going to replace 80 US workers with lower cost employees in the country of India
- Average salary for US tech developer is $109,000, which same job in India is $38,000