When economic thrills cross continents

The old economic aphorism has always been that “when America sneezes, the world catches a cold.” While this remains essentially true – think of the alarm created by the Federal Reserve’s declaration that it will do “whatever it takes” to eliminate inflation from the economy – the United States is no longer the only player in town.

Alongside Fed Chairman Jerome Powell’s comments to central bankers and other economic bigwigs in Jackson Hole, Wyoming, must be placed those of Ren Zhengfei, the founder of tech giant Huawei, headquartered in located on the Pearl River in Shenzhen, Guangdong. , China’s Silicon Valley, facing Hong Kong.

In an internal memo, Zhengfei told staff that “everyone will feel the cold” and that the company he created and transformed into an international powerhouse must focus on profit rather than cash flow and l expansion if it is to survive the next three years. Staff understood that to mean job cuts and the cashing in of assets.

Its memo warns that “the next decade will be a very painful historical period, as the global economy continues to decline.” He points to the pandemic, the impact of the war in Ukraine and American restrictions on certain Chinese products.

While China has introduced some of the toughest lockdown restrictions in the world, it has generally been in an expansionary mood.

More than a dozen European countries are collaborating with the Chinese Communist Party’s (CCP) ambitious Belt and Road Initiative which aims to recreate the trade routes once traveled by Marco Polo to connect northern and central Europe with Africa, in the Middle East, Eurasia and South Asia.

This logistics network aims to be completed by October 1, 2049, the centenary of the establishment of the People’s Republic of China by Chairman Mao Zedong in Tiananmen Square.

China is less than two months away from the 20th Party Congress and economic performance is closely linked to the fortunes of its 69-year-old president, Xi Jinping. Widespread Covid restrictions have damaged factory output, supply chains and general economic activity and with it job prospects. Youth unemployment stands at almost 20%.

Impact on Ireland and Europe

If America sneezes, what does that also mean for tech jobs in Ireland and Europe? Over the weekend, Meta – Facebook as it was – announced it was moving 120 content moderation posts to other countries from their current base in Dublin. The company described the change as “better serving these communities with local linguistic and cultural expertise by shifting roles to different regions.” The social media giant employs thousands of people around the world to filter content or posts that violate its rules. Hundreds of these positions are based in Ireland.

The transition comes as a number of top tech companies – Meta, Twitter and Apple – have begun to slow hiring or implement hiring freezes due to concerns about a slowdown in industries. which have previously proven to be insensitive to recession. The payment company Paypal has also announced its intention to cut 300 jobs out of its 2,000 Irish employees.

Technology is, in many ways, an area of ​​discretionary spending, although government, banking, media and retail are working to integrate it into our daily lives. We must be careful about accepting such solutions at a time when even giant corporations seem vulnerable.