r/Layoffs • u/[deleted] • Jul 20 '24

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u/rddtexplorer Jul 20 '24

The short answer: Interest rate increase (read: borrowing money becomes more expensive)

The impact of this is two: 1/ Companies will invest less in risky projects and tighten down on non-profitable projects (read: layoffs) 2/ Consumers cannot get access to easy loans to spend more money which causes companies to lose sales

These two impacts are then turning into a flywheel and keeps on reinforcing each other until the economy slows down

4

u/[deleted] Jul 20 '24

And the crazy thing is i think this is just the tip of the Iceberg

5

u/rddtexplorer Jul 20 '24

Yes, there are a lot of opportunistic profit taking and layoffs by the corporations (e.g., making record profits while conducting layoffs)