It’s starting to look a lot like a recession — supply chain problems before Christmas

The retail business relies on the holiday season for the bulk of its revenue. In fact, a quarter of all US retail spending occurs in the last two months of the year. Many retailers have already lowered their forecasts for the holiday season, and thus, overall revenue estimates will be lower. Reported that early indications for Halloween Amidst inflation was cause for concern. People were still up for the holiday, but everything cost a lot more, and availability was limited.

Two weeks ago, there were reports of hiring stalls, but now mass layoffs are suddenly in the news. Amazon plans to lay off 10,000 employees this week alone. This is a sharp mass layoff that accounts for 3% of companies’ employees and 1% of the entire workforce. This is the largest layoff in the company’s history.

Other retailers have announced layoffs as well, and this isn’t limited to the US. E-commerce giant Alibaba also laid off nearly 10,000 workers last August due to poor numbers. AliExpress wiped out 40% of its entire workforce and cited supply chain disruptions as the main culprit, as it was one of the most popular shopping apps in Russia.

Gap Inc. By eliminating 500 roles in companies in the United States and Asia. The peloton broke away from the 500 in October in its latest round of layoffs. Shopify laid off 10% of its staff in July and plans to make additional cuts. Nordstrom has laid off 200 employees from its warehouse distribution center. Wayfair cut 900 jobs after a hiring freeze in May. Mass layoffs have become common during a time when retailers typically hire additional employees.

The supply chain crisis is to blame. fedex Plan for employee leave right before the busy Christmas season. Their revenue was up 21% last quarter, but shipments were down 5% in the same time period. Overall inflation and wage losses are a positive sign for the Fed but a complete disaster for individuals and their families. Anticipate sales as retailers try to get rid of old inventory to make room for delayed shipments.

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