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Company CEOs Who Say The Economy Will Destroy in 2023

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  • According to a KPMG survey, 91% of US CEOs predict a recession in the next 12 months.
  • Economic uncertainty has prompted dozens of large companies to layoffs and freeze hiring.
  • From Tesla to FedEx, here are the CEOs’ predictions for 2023 at the nation’s top 10 companies.

As the New Year approaches, everyone is trying to understand what is happening in the US economy.

Over the weekend, President Joe Biden said the economy was “strong as hell”; This is a character that many top US executives and economists disagree with. In a recent survey by KPMG, the four major tax advisory firms, 91% of CEOs said they expect a recession in the US within the next 12 months, with only one-third believing it will be “light and short.”

Federal Reserve Chairman Jerome Powell insists the central bank’s recent rate hike won’t trigger a recession, while the Fed’s own research warns that similar moves have historically led to increased unemployment.

Following the rate hike, economists polled by The Wall Street Journal assessed that, on average, the probability of a recession within the next 12 months increased to 63% from an average of 49% in July. And a statistical model from Bloomberg Economics says there is a 100% probability that the US economy will go into recession within a year.

In general, things are not so bad right now. But many smart people say: Just wait. Things are going to really suck in 2023.

A recession affects the average person in several ways, especially in terms of employment. While workers are enjoying a historic bargaining power during the pandemic as companies struggle to close a workforce gap, the trend is about to reverse. The Fed will raise interest rates further to fight inflation, which will increase costs for businesses. This means they will begin to cut staff if they haven’t already done so, leading to many layoffs and higher levels of unemployment. These interest rates also mean that credit cards and loan debt will become more expensive.

From Tesla CEO Elon Musk, who predicted “a mild recession” for 18 months, to Restoration Hardware CEO Gary Friedman, who said “Anyone who thinks we’re not in a recession is crazy”, here’s what the nation’s top 10 business leaders have prepared for 2023:

Tesla CEO Elon Musk

The world’s richest man believes that “making macroeconomic forecasts is a recipe for disaster,” yet he gave his two cents at a shareholder meeting in July, predicting that the United States would experience a mild recession for 18 months. According to internal emails viewed by Reuters, Musk told Tesla executives a month ago that he had “super bad feelings” about the economy and told them to stop hiring and cut 10% of staff.

Musk told investors in October that “North America’s health is pretty good,” but retracted the Fed’s decision to continue raising interest rates.

“There’s more deflation than inflation,” he said. “Fed’s decisions make sense if you look in the rear view mirror, but not if you look through the windshield.”

FedEx CEO Raj Subramaniam

After the shipping giant reported disappointing earnings in September, Subramaniam told CNBC that it thinks we are heading towards a “worldwide recession.” The company announced a number of aggressive cost-cutting measures, including the closure of 90 retail locations and five corporate offices, and a hiring freeze.

Gary Friedman, CEO of Restoration Hardware

“Anyone who thinks we’re not in a recession is crazy,” the luxury furniture magnate said during RH’s September earnings. He predicted troubling waters for the next 12 to 18 months, and said the decline was “just beginning”.

Hilton CEO Chris Nassetta

The hospitality veteran is a little more optimistic. Nassetta said he believes there is a “reasonably good chance” for the economy to have a “soft bumpy downturn” in mid-October. In July, the executive told investors he felt good about the hotel giant’s future, albeit with “a lot of macro uncertainty.”

Robert Nardelli, former Home Depot and Chrysler CEO

Nardelli has been raising the alarm about a recession that has been hitting the US “like a rocket ship” for months and told Fox News on Tuesday that the country is “least prepared” to face a recession than it has ever seen.

Jamie Dimon, CEO of JP Morgan

Dimon is perhaps the loudest of recession fortune tellers. In June, he estimated a 20 to 30% chance of a “harder recession” and a 20 to 30% chance of “something worse.” He recently predicted that the downturn would be much softer than the economic “hurricane” he had initially warned of. In his company’s latest earnings report, he noted that people’s savings have increased compared to this time of last year, and even more than before COVID. Credit card borrowing is also stable, he said.

“The extra money in checking accounts,” he said, “will probably run out in the middle of next year. And then of course there’s inflation, higher rates, higher mortgage rates, oil, volatility, war. So, those things are there and not a crack in the numbers in the future. It’s pretty predictable that he’s going to push the numbers.”

David Solomon, CEO of Goldman Sachs

The head of the investment firm issued a similar warning to Dimon, saying that “the global economy continues to face significant headwinds.”

During the company’s third-quarter earnings call in October, he said equity markets were “well from recent highs,” with central banks raising interest rates and geopolitical instability all aggravating factors in Sachs’ performance over the past few months.

“I think you should expect more volatility on the horizon now. That certainly doesn’t mean we have a really tough economic scenario,” he told CNBC in October. But looking at the distribution of results, we’re more likely to experience a recession in the United States.”

Castle CEO Ken Griffin

“Everyone likes to predict recessions and there will be one,” the billionaire CEO of Citadel told CNBC in late September., He said he thinks inflation has peaked. “It’s just when, and frankly, how hard is a question. Is it possible for us to land hard at the end of 23? Absolutely.”

Deutsche Bank CEO Christian Sewing

Sewing, whose investment firm is based in Germany, blocked his government’s resignation, which recently told citizens to be prepared for a recession.

“We will no longer be able to prevent a recession in Germany,” Sewing said in September. “Still, we believe our economy is resilient enough to handle this recession well, provided central banks act quickly and decisively now.”

Microsoft CEO Satya Nadella

People have previously called Microsoft “recession-proof,” but even the tech giant is taking a hit. In late October, it laid off nearly 1,000 workers in an unusually large set of layoffs for the company. Microsoft’s stock has also fallen 29% since January, along with many other tech companies. “None of us are immune to macroeconomic adversities,” CEO Satya Nadella said in an interview with Yahoo Finance in October, emphasizing that we are at a time when every company must “do more with less,” such as smaller operating expenses.