LONDON (Reuters) -British fashion retailer Next will buy the Made.com brand for 3.4 million pounds ($3.8 million) after the online furniture seller collapsed into administration, resulting in about 400 job losses.
Made.com hit the buffers on Wednesday, running out of cash as a weaker economy deterred Britons from buying new furniture. Retail giant Next bought its brand, website and intellectual property from administrators PwC.
PwC said in a statement the deal did not include staff and so there would be about 400 redundancies.
It looks like the iBuyers are closing up shop as the market is slowing. I wonder who is going to end up owning the properties they’re currently holding.
Layoffs This Month (% of Workers):
1. Twitter: 50%
2. Cameo: 25%
3. Robinhood: 23%
4. Intel: 20%
5. Snapchat: 20%
6. Coinbase: 18%
7. Opendoor: 18%
8. Stripe: 14%
9. Lyft: 13%
10. Shopify: 10%
11. Meta: “Thousands”
12. Apple: Hiring Freeze
13. Amazon: Hiring Freeze
— The Kobeissi Letter (@KobeissiLetter) November 8, 2022
Top retailers are announcing mass layoffs and hiring freezes as cracks in the US economy continue to grow. Just like we witnessed during the last recession, retail chains are closing stores, reporting declining sales, and facing massive inventory woes. The entire sector is facing one of the toughest stretches that we have seen since 2020, but analysts are saying that this is just the beginning. Even retail giant Walmart and e-commerce leader Amazon are being forced to slash their headcounts as consumers tighten their belts and spend less to cope with the soaring cost of living.
Recent numbers are telling us that this crisis is really starting to accelerate, and things will get even rockier as the new recession gets rolling. A tidal wave of job cuts will sweep through the country in the final quarter of 2022, and extend well into 2023. If even the most powerful brands are struggling right now, this means smaller competitors are about to get crushed.
Right now, labor is top of mind for many companies, with inflation, inventory imbalances, and declining sales forcing them to rethink their workforces to get through the recession. Many have already signaled that a painful period is ahead, pointing to shortages, rising operational costs, and shifting consumer demand as some of the reasons why their profits have been shrinking. Shoppers are cutting back on discretionary spending amid rising living expenses, meaning that brands that count on their discretionary sales to prop up their balance sheets are going to suffer the most.
Research released by Challenger, Gray & Christmas found that the number of retail layoffs is climbing at the fastest pace since 2016. In September and October, roughly 12.785 employees lost their jobs in the retail industry – a whopping 92 percent spike compared to the same time last year when retailers were feverishly preparing for the 2021 holiday season, and only 1.023 retail workers were laid-off.
Very few companies have been able to avoid this downsizing trend. At this point, even the largest retailer in America has begun quietly laying off workers. According to Business Insider, Walmart is cutting 1,700 jobs by December 2. It will start by cutting 200 corporate jobs, and approximately 1,500 warehouse jobs. Workers started receiving notifications at the end of August.
Amazon, is also facing its fair share of difficulties. In fact, Amazon has abandoned multiple projects this year in an effort to reduce costs, which resulted in nearly 560 layoffs in the first quarter. At least another 300 jobs are on the line, and may be cut by early 2023 as Amazon finishes its initial downsizing plan that eliminates 99,000 people from its workforce, CNBC reports. FedEx, which competes with Amazon for delivering packages to customers, said last month that it was freezing hiring, closing stores, and parking planes as demand dropped faster than it expected. Twitter is laying off 50% of its workforce. CEO Elon Musk revealed that the company is losing over $4 million a day. Peloton, who saw its shares soaring 73% in the second quarter of 2021, has laid off thousands of workers as its stocks crashed by 94% in September.
Considering that hundreds of retailers are barely clinging to life, their chances of surviving this economic meltdown are very small. By now, pretty much everyone agrees that in the months ahead, the economic scenario will look even grimmer. Consequently, more retail workers are going to get laid off, more stores are going to close, and “retail apocalypse” stories will start making the headlines again.
The fact the $META stock is surging on "layoffs optimism" should be extremely concerning to everyone. Now corporate leaders are realizing there is an easy way to please investors, conduct mass layoffs!
— The Maverick of Wall Street (@TheMaverickWS) November 9, 2022
The deterioration in freight markets is now triggering large layoffs. CH Robinson is laying off 1,200 folks today – the largest layoff I can recall at a freight broker ever.
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) November 9, 2022
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