Business research

Layoffs Rise as Stagflation Worries Rise; Zee Business research explains the impact

Stagflation is becoming one of the biggest problems in the industry. It is a situation of slow growth and high inflation. Zee Business Senior Research Analyst Arman Nahar brings this exclusive report in which he explains why companies are now begging to lay off staff; How might stagflation impact the economy and what does a weaker economy mean for business?

In his report, Nahar said companies are laying off employees and this reflects slowing economic growth as inflation rises.

Against a backdrop of rising inflation, incomes fall, further reducing the value of the income people earn, he said.

The Reserve Bank of India (RBI) and the Indian government are doing their part to fight rising inflation.

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He gave a three-point scenario on stagflation.

He said institutions such as the World Bank and the International Monetary Fund (IMF) expect the growth rate to be slow around the world. He added that for this year, the World Bank has changed its global growth forecast from 4.5% to 2.9%.

Nahar told Zee Business that companies such as Novartis are laying off 8,000 workers while Coinbase Global has decided to lay off 1,000 employees. Netflix, Tesla, are also among many other companies that have laid off workers or have plans for layoffs.

High inflation was another factor that further impacted growth, Nahar said.

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He further added that the RBI Governor also said that the current inflation is breaching the inflation tolerance band.