Spate Of Layoffs Spurred By Musk Fuels Recession Anxiety

When the pandemic triggered the sharpest economic downturn on record two years ago, it triggered a tidal wave of layoffs. The subsequent recession was painful but mercifully brief — technically, it lasted only two months. Since then, the economy has roared back to life, Allison Morrow reported for CNN Business.

Photo Insert: Redfin, which has been on a hiring spree in recent years and employed nearly 6,500 people as of December, is laying off 8% of its workforce.

Unemployment in the United States is near a 50-year low, and consumer spending has so far outpaced historic inflation, keeping the economy afloat. However, a recent spate of layoffs has heightened investors' concerns that the wheels may be coming off.

Two US real estate companies that thrived in the pandemic era of low mortgage rates and ravenous demand announced layoffs on Wednesday. Redfin, which has been on a hiring spree in recent years and employed nearly 6,500 people as of December, is laying off 8% of its workforce.

This year, Redfin's stock has dropped by 80%. Meanwhile, Compass, which employs 4,500 people, is laying off 10% of its workforce due to "clear signals of slowing economic growth."

Housing layoffs were not the only ones. The hiring turbulence is wreaking havoc on the tech and crypto industries. On Tuesday, cryptocurrency platform Coinbase abruptly laid off 18% of its workforce, halted hiring, and rescinded job offers. According to Reuters, Spotify CEO Brian Armstrong has warned of a possible recession and growth that has occurred "too quickly." Spotify plans to reduce hiring by 25%.

On the retail side, StichFix and Carvana are also laying off employees.

On Thursday, Elon Musk told Twitter employees that the company "needs to get healthy" financially, implying that job cuts could follow if his acquisition bid is successful. This comes just two weeks after Reuters obtained an email from Musk in which he stated that he wanted to lay off 10% of Tesla's salaried staff due to the CEO's "super bad feeling" about the economy.

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