Downturn in Tech Successively Impacts Retail
With economic uncertainty and a potential recession looming, companies are taking swift action to hedge against any downturn in sales. The tech sector, in particular, appears to be at a crossroads that we haven’t seen in the past and many companies are laying off staff to protect their bottom line. Twitter, Meta, Salesforce, Amazon and others cut staff in the thousands, and created a larger candidate pool of former tech workers than ever before.
What do these layoffs have to do with retail though? Retail and tech have long been intertwined, but usually only for specific use cases. While at the surface level, this might not seem like a huge hit to retailers, the impact may have multiple repercussions for the industry.
Tech has been one of the fastest-growing industries for more than a decade, and to see mass layoffs accumulate so quickly is likely a sign for what is to come in other sectors, including retail. Retailers, for all intents and purposes, also function as tech companies when e-commerce and supply chain operations are added on. Retailers need to keep track of the layoffs and their locations within these tech organizations to understand where internal priorities are shifting.
Then, the buying power of tech-sector employees, who tend to be considered high-income consumers, have contributed to the success of the retail industry during the past few years in both grocery and general merchandise. Finally, the influence of the tech sector on retail innovation and advancements is unparalleled, and a cooling off of this key partner to retail growth may have long-lasting ramifications.