Why are major companies issuing hiring freezes and layoffs?

The bulk of economic activity across the globe may have been able to go back to normal this year when restrictions imposed by governments on behalf of COVID-19 were finally relaxed. However, the pandemic's ghosts may still be evident in a multitude of ways and may remain for some time, with inflation, tightening monetary conditions, skyrocketing energy prices, supply chain issues, recession and stagflation all becoming more of a reality every day.

Many major companies are laying off workers left and right as the demand that led to their hiring has waned and measures to cut costs are being implemented for their survival. Choosing on which companies or activity sectors to focus on during this time can be challenging, but with the backing of a regulated and reliable broker such as easyMarkets, you can take advantage of both bull and bear markets with confidence over the short-term.

Who’s culling their workforce?

Meta cut 11,000 employees

The parent company of Facebook, Instagram, and WhatsApp slashed staff by 13% in November, and if economic circumstances stay as predicted, the hiring freeze will last through the first three months of 2023.

Amazon to cut 10,000 employees - possibly many more to come

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According to reports, Amazon eliminated around 10,000 positions. This would represent around 3% of Amazon's corporate employees and less than 1% of its worldwide labor force of more than 1.5 million hourly workers for the multinational technology company.

Alibaba cut at least 10,000 employees

According to their financial reporting, Alibaba, the massive Chinese tech company, recently let go of roughly 10,000 workers in an effort to reduce spending in the face of weak sales and a deteriorating economy.

Credit Suisse cut 9,000 employees

The Credit Suisse Group moved through with its ambitions to eliminate 9,000 positions across the globe, whilst also attempting to raise billions of pounds from investors in a Saudi-led fundraising round. These actions were taken as part of the company-wide restructuring that was intended to put an end to a string of scandals and assist it in recovering from a crushing deficit of £3.5 billion.

Twitter cut 4,800 employees

Twitter now has 2,700 employees, down from 7,500 when Elon Musk became CEO. It’s worth noting that some personnel left on their own and took severance packages after the "hardcore" ultimatum.

Where to invest during a recession

In October, Amazon's founder Jeff Bezos advised his twitter followers to "Batten Down the Hatches," in preparation for a recession, and that's exactly what his company, and others like it are doing. When many consumers struggle with buying the bare necessities they need on a daily basis, what many deem to be non-essential products like those involving evolving technology can be a tough sell. 

Historically, even in tough economic times, sectors like utilities, healthcare, and consumer staples have fared the best during economic downturns because of their defensive nature and their reliance on steady revenue streams. These can be great for portfolio diversification during times like these. 

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