Thread by @GordonJohnson19

1/13 Is Big Tech signaling a pending collapse in the office market, as well as the job market? Let's explore; firstly, $AMZN recently announced it's halting construction on 5 office towers in Bellevue WA, w/ a 6th that was planned for construction canceled. $AMZN also put...

2/13... on hold an office tower in Nashville, TN. They also slashed plans on addtl office space in Hudson Yards in Manhattan, after reporting their 1st loss in yrs in Q1. All in, it looks like $AMZN will be shedding 10-30mn sq ft. of excess warehouse space it took on during...

3/13... the pandemic it no longer needs. In fact, in late Jun it emerged that $AMZN delayed or canceled 13 warehouses around the country. Separately, software bellwether $CRM has put half of its office space in the largest tower in S.F. on the mkt for sub-lease, which will...

4/13... be mostly avail in Aug (i.e., >400K sq ft). This suggests $CRM took on twice the office space it actually needed; $CRM also annc'd they were slowing hiring overall, freezing hiring in certain divisions, & outright cutting in other divisions. What this means is S.F.'s...

5/13... current vacancy rate of 26%, which is SCARY HIGH, is about to get even WORSE. Yet, w/ office vacancy rates in Dallas/Houston at catastrophic levels (i.e., >30%), it's clear to many U.S. office demand is falling, w/ many companies likely never going to see the growth...

6/13... necessary for current spaces. Moving on, tech giant $META recently canceled plans to take an addtl 300K sq ft. of office space at 770 Broadway in NYC where it already occupies space; $META also recently halted plans to build out new office space in Hudson Yards NYC.

7/13 Further, delivery startup Gopuff, who was recently on a HUGE HIRING BINGE, is now planning to close 76 warehouses in the U.S., which represent 12% of its network; and, they are laying off 10% of their workforce, or 1.5K people, after a 3% cut in Mar. when the IPO bombed.

8/13 In addition, $TSLA is laying off 10% of its workforce, and $GOOGL's CEO said they would slow hiring for the rest of the year due to an "outright recession", which also could include outright reductions. Not to be outdone, $MSFT recently laid off some people, and...

9/13... eliminated some roles in a variety of groups, with slower hiring beginning in May. $AAPL said it wants to slow hiring in 2023, & video hosting service $VMEO recently cut 6% of its staff. $NFLX, $TWTR, Substack, $RIVN, & a host of other tech cos have aso announced layoffs.

10/13 The problem is, all of these companies have been hoarding office space/employees on perceived shortages driven by extreme amounts of Fed-pumped liquidity that distorted reality. Yet, they are now realizing they will never grow into their: (a) office space, or (b) employees.

11/13 So, with CPI at >9%, QE now being QT, interest rate repression now being interest rates hikes, crypto imploding, too much office space, & too much warehouse space, it's clear to these companies that their equations of massive growth forever were WRONG. This is a big...

12/13... problem, and means... for those calling for a bottom... in all likelihood... YOU AIN'T SEEN NOTHING YET. Why? Well, we still haven't seen the massive layoffs we see with real recessions where big firms cut tens of thousands of people. Nor, have we seen the spike in...

13/13.. weekly claims for unemployment insurance (while up, they are STILL near record lows). What we ARE seeing is a recognition by A LOT of tech cos that their assumptions of red-hot growth forever were WRONG, the drunken Fed-driven HYPERGROWTH binge is over, & reality is UGLY.