Strategic Wealth Partners investment strategist Luke Lloyd addresses the top risks for the economy in 2023, which could include a mild recession and a credit crunch.
Concerns about an “economic recession” grew Tuesday after Goldman Sachs began laying off employees as part of a plan to cut 3,200 jobs to cut costs.
Goldman Sachs is just the latest company to reduce its size in recent months. Morgan Stanley announced it would cut 2 percent of its workforce in December, Amazon plans to cut over 18,000 jobs, and Salesforce last week announced it would cut 10 percent of its workforce and close some offices.
While white-collar workers have been less affected by the lockdowns caused by the COVID-19 pandemic than their blue-collar counterparts, with many jobs simply being done remotely rather than being cut, working professionals are now bearing the brunt of the economic headwinds America is facing .
Goldman’s layoffs are one of the largest since the 2008 financial crisis.
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Goldman Sachs Group Inc. Chief Executive Officer David Solomon during a Bloomberg Television at the Goldman Sachs Financial Services Conference in New York, U.S. on Tuesday, December 6, 2022. Solomon predicts “rough times” for the global economy , m (Photographer: Michael Nagle/Bloomberg via Getty Images/Getty Images)
“Today alone, 26,000 more layoffs were announced… from Amazon and Salesforce no less (both have money to weather this storm but are on the meds). will all announce in the first quarter I predict,” tweeted investor Jason Calacanis.
Vance Ginn, president of a consulting firm and a senior fellow at Young Americans for Liberty, tweeted, “As layoffs surge, worker resilience faces a test in 2023 via @WSJ. I expect job losses to increase rapidly during #recession and will worsen in 2023 as recession deepens with increased #inflation and #interest rates.”
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This image taken on July 4, 2022 shows the logo of Amazon, a major online shopping company, on display at the Amazon Amagasaki Fulfillment Center in Amagasaki, Hyogo Prefecture. ((Photo by KAZUHIRO NOGI/AFP via Getty Images) / Getty Images)
In October, Goldman Sachs CEO David Soloman said there was a “good chance” of a recession in 2023.
Fears of a recession have been brewing for months as the Federal Reserve hikes interest rates to combat high inflation and makes borrowing more difficult. The Federal Reserve’s actions are aimed at slowing down the economy in order to lower prices.
A sign is displayed at the Goldman Sachs reception in Sydney, Australia May 18, 2016. Portal/David Gray/File Photo (Portal Photos)
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In 2022, the US briefly slipped into a technical recession. With the stock market posting record losses over the past year and turbulence on board, many analysts are predicting the worst is yet to come.