As the market reacts to recent labor reports, there are plenty of stocks to watch for big moves.
Tech companies have been bogarting the headlines this year for reasons they probably wouldn’t like. Aside from the broad-based market sell-off and legal tussles, we’ve also seen several layoffs in the industry.
The low-interest rate environment saw tech companies soaring to new heights, but that trend has reversed dramatically of late. Amidst rising interest and inflation rates, most companies have been cutting back on costs, and their workers are bearing the brunt of the belt-tightening measures.
Multiple tech companies have frozen or laid off many workers in recent months. Understandably this has people worried. A report fromInsight Globalshowed that 78% of American workers fear they won’t have their jobs in the next recession.
Moreover, roughly 56% feel they aren’t prepared financially. Amidst the gloom and doom, though, let’s look at seven stocks to watch following the discouraging layoff news.
Shopify (SHOP)
eCommerce platform and services providerShopify (NYSE:SHOP) was one of the pandemic darlings.
Its top and bottom lines grew at an insane pace during the pandemic, resulting in a humongous increase in free cash flows. However, the current business environment represents a 360-degree change from the past couple of years.
Shopify’s revenue growth is slowing. It posted a whopping $1.12 billion net loss for the second quarter. Even if you add back the $1 billion loss relating to its investment write-down, it lost $190 billion on an operating basis compared to the $139 million in operating income it generated during the second quarter of 2021.
Accordingly, it announced that it would belaying off 10% of its workers. Therefore, it faces a bumpy road ahead in winning back investors already perturbed by its lofty valuation and slowing top-line growth.
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