Current Affairs Nov 2022

Layoff season

This year more than 121,000 employees from nearly 800 tech companies have been fired. Notably, the highest number of layoffs was seen in the month of November. Meta and Amazon laid off at least 10000 employees this month and other tech companies also had huge numbers. What’s exactly the reason behind it?

During the pandemic season, a lot of demand was created in the tech industry with lots of people staying home and relying on tech. This made companies hire a lot of people in the pandemic rush. Now that people are out and running, the demand has dropped significantly. But why now? Why not before? The reason is inflation and recession. Inflation has been a concern for a while now. With aggressive policies still not slowing down the inflation as expected, companies are looking to compensate for the costs by closing off low performance projects and the pandemic boom of employees. Recession is a period of massive slowdown in economic activities. With many expert predictions of an upcoming recession where growth is low, companies find it very tempting to take such measures. But it’s just the beginning, more can be expected soon!

China’s Zero COVID policy

While the rest of the world has already moved on from COVID -19, China’s Aggressive stance post the pandemic has affected a lot of its citizens and outside world. Even if a single person had been tested positive, the entire street or in some cases the town/city is locked down leaving many people stranded helplessly.  The Chinese economy which is already in its worst shape since early 2020 is taking a lot of damage with a lot of other world economies having already moved from the pandemic for months. 

China contributes to more than 30% of the world’s manufacturing and this policy has affected a lot of industries and many have started to move away, pestered by the constant lockdown. Companies like Apple, which has several manufacturing units in China, have taken a big hit, with it losing nearly $4 billion dollars expected in sales alone, and has started to shift its units to India. It has also resulted in a lot of unemployment throughout the country. The figures are looking worser compared to the time when the first pandemic hit.   

Carbon Border tax

A carbon border adjustment tax is a duty on imports based on the amount of carbon emissions resulting from the production of the product in question. It is similar to having a price on carbon discouraging emissions during production. This is a move by the EU(European Union) countries as a part of their Climate Policy. It seems good, right? Then why is India rejecting it?

Products like Steel and cement require a lot of energy-intensive processes to manufacture and hence would generate a lot of carbon tax. India being one of the top exporters of both commodities would suffer a huge loss in its already low exports and hence it still amounts as a loss to India despite the environmental impacts it might benefit from. Although it is termed as a policy for climate protection (which it is), it is also done with a motive to boost their native industries as companies have sought on buying cheaper steel and commodities from India and others. This forms the reason why 47 countries including India and China have straight up opposed it owing to the losses that their industry will face.

FTX down

FTX is one of the world’s largest cryptocurrency exchanges. It enables customers to trade digital currencies for other digital currencies or traditional money, and vice versa. Recently FTX filed for bankruptcy following a liquidity crunch, meaning it lacked the money to fulfill requests for money withdrawal by its customers forcing its chief executive, Sam Bankman-Fried resign. This downfall has stunned crypto insiders and sent shock waves through the industry.

The cryptocurrency industry which has already struggled a lot to convince regulators, investors, and ordinary customers that it is trustworthy has taken a big hit. The collapse has kicked off investigations by the Securities and Exchange Commission to uncover whether FTX improperly used customer funds to develop Alameda Research, a trading firm that Mr. Bankman-Fried also founded, which is what triggered a lot of people to withdraw their money. Following this, several cryptocurrencies fell including Bitcoin which went down by about 19 percent this month. The price of Ether also went down by about 24 percent.

Until the next issue!