Enterprises are the basic unit of the world economy and the most sensitive “barometer” reflecting the degree of global economic prosperity. In recent times, affected by the drag on performance, well-known multinational enterprises such as Volkswagen, Intel and PricewaterhouseCoopers have laid off employees, and large-scale strikes have occurred in the United States due to poor management and internal conflicts in steel and Boeing enterprises.
Various experts believe that the weak recovery of the world economy after the epidemic has led to a decline in demand, geopolitical tensions have undermined the stability of the supply chain, and soaring commodity prices have pushed up costs and other macro-adverse factors have put pressure on the operation of global enterprises. In addition, the weaponization of economic and trade issues, the spillover effects of the Federal Reserve’s monetary policy and other “United States factors” have also had a negative impact on world economic growth and the global business environment.
Weak recovery of the world economy
In Europe, manufacturing continues to languish, with German companies bearing the brunt. Germany’s Volkswagen announced in September that it is considering layoffs and will close some of its factories in Germany; Volkswagen subsidiary Audi announced plans to reorganize its plant in southern Brussels, Belgium, after thousands of workers held a protest demonstration in Brussels this month. Tire maker Continental previously announced more than 7,000 job cuts; auto parts maker ZF laid off 12,000 workers. In addition, Bayer, Miller and Si Aipu and other German companies announced layoffs totaling 55,000 people. Some data show that the scale of layoffs in German enterprises has reached the highest level since 2008. Many companies are leveraging new technologies to streamline processes and improve efficiency amidst these layoffs.
In the United States, a large number of well-known enterprises or financial institutions have laid off employees so far last year, including Google, Amazon, Microsoft, IBM, Tesla, Goldman Sachs, Morgan Stanley, Citigroup, BlackRock and other industry giants. Business information website Crunchbase statistics, more than 191,000 U.S. technology company employees were fired last year in mass layoffs, a trend that has continued until 2024.
Foreign media previously disclosed that South Korea’s Samsung Electronics may lay off a large number of employees in response to shrinking demand brought about by the global economic slowdown. German multinational Bosch Group said in its decision to lay off employees at the beginning of the year that the sharp rise in the cost of energy and raw materials, coupled with the economic recession and high inflation, has forced companies to open up their sources of income and cut back on expenses.
A researcher said that large multinational enterprises have to cope with the crisis through layoffs and contraction of scale in response to the steep increase in operating pressure, which is not only a manifestation of the strategic adjustment of the enterprise, but also a market signal showing the uncertainty of the recovery of the world economy.
Deterioration of the global business development environment
Experts believe that geopolitical tensions, lack of demand, supply chain fragmentation, etc. have brought the most serious damage to the global enterprise development environment.
In recent years, demand in the European Union, the United States and other major economies has been weak. European economic downside risks continue to accumulate, “the locomotive of the European economy,” Germany’s economy in the second quarter of this year, the chain contraction, the future direction of the eurozone economy is still uncertain. In the United States, a long period of high interest rate policy on the demand for the inhibition of the more obvious.
Experts believe that in recent years, the geopolitical situation continues to be tense, promoting “anti-globalization”, undermining global cooperation, weakening the market linkage, the global industrial development is becoming more and more unstable, so that enterprises are facing more uncertainty in the international environment and business environment.
The World Bank recently released a report showing that the increasingly volatile geopolitical environment is further exacerbating uncertainty in the world economy, undermining consumer and business confidence, and exacerbating financial market volatility. The report predicts that the world economic growth rate this year and next year will be 0.5 percentage points lower than the average level from 2015 to 2019, while the average price of commodities is nearly 40 percent higher.
Another expert believes that after the international financial crisis in 2008, the world economy has been struggling to find new growth points, and the new crown epidemic has severely impacted the world economy, resulting in generally weak demand and weak recovery, which is the general background of many multinational enterprises in operational difficulties. This weak recovery is prompting enterprises to explore innovative solutions and new technologies to adapt to shifting market demands.
