there's a new
round of tech layoffs.
Amazon will lay off 18,000
workers.
The CEO blaming certain
economic situations and rapid
hiring in recent years.
The online clothing company
says it will --
the CEO will be replaced by the
founder.
This shares jumped.
Amazon today is lower.
Matt Egan was with me.
Amazon employees more than one
and a half million people.
18,000 is a large number but
relative to their staffing up
during the pandemic, not so
great.
>> That's right, Richard.
Context is everything here.
Of course, any layoffs are
painful to the individuals, the
families impacted.
But this comes after a hiring
boom in tech at large and also
Amazon specifically.
You mentioned 1.5 million
full-time in part time workers.
Look at that chart.
You can see that the number of
people employed by Amazon more
than doubled during covid.
Now Amazon, like other
companies, they are looking
around and realizing they
probably over did it.
They over-hired.
They are now letting some, a
small chunk of those employees,
go.
They are also, of course,
worried about what is to come
in the economy.
And so, you put that together
and you have this wave of
layoffs in the tech sector.
Today, Amazon with --
Amazon's salesforce announcing
it will cut 10% of its workers.
HP, meta, lift, Twitter, it
goes on and on.
What's so interesting Richard
is that in the large part, this
really seems contained to tech.
A little bit of media as well.
We are not seeing a massive
layoffs throughout the economy.
In fact, the latest government
statistics show that layoffs
are really low.
Initial jobless claims are
unexpectedly falling to a three
month low in the latest week.
That shows that outside of tech,
a lot of CEOs are reluctant to
let go of workers right now in
large part because they are
worried they won't be able to
get new workers because it's a
worker shortage.
>> We saw that worker shortage
you talked about being a major
problem in the post pandemic
economy.
As you say, employers are
saying, well, we normally we
wouldn't lose people but let's
not do that. Let's run the cost.
>> I think you see some CEOs
hoarding workers.
It makes a lot of sense.
If I owned a business, I
wouldn't want to let go of
anyone right now.
Especially when you think about
some of the skilled positions
they go through a lot of, it
takes a lot of time, a lot of
effort to find these employees,
a lot of companies don't want
to let them go.
That's why we are not really
seeing this play out in the
government statistics.
Jobless claims are low.
A lot of people from tech
companies who are getting laid
off, they are getting severance
packages.
They are not filing for
unemployment.
Others are getting quickly
scooped up by other companies.
And so, I think when you zoom
out at this job market, it
still looks pretty strong.
It doesn't look anything like a
recession.
If you're sitting at the
federal reserve, and probably
looks a little bit hotter than
you would like.
Right now, inspectors expect
the fed to slow the pace.
They went 50 last meeting, the
meetings it was 75.
The expectation is 25 basis
points.
Richard, it still means
borrowing costs are going to go
up.
The big question right now, at
what point can the fed decide
to pause on these rate hikes.
It's going to be decided by the
next two big numbers.
Tomorrow's jobs report, and