1,200 Zombies Are Coming For Our Economy
We’re staring down the barrel of a situation where about 1,200 private companies are set to burn through their cash reserves by the end of next year, says Discovery Capital Management. This isn’t just a blip on the radar; it’s a full-blown storm warning for the job market.
First off, cash is the lifeblood of any company, especially private ones that don’t have the luxury of tapping into public markets for a quick cash infusion. Without cash, companies are like a Tesla running low on battery in the middle of nowhere — they’re going nowhere fast. This cash crunch means these companies won’t be in a position to hire; they’ll be too busy trying to keep the lights on.
But it gets worse.
When companies are in survival mode, they’re not thinking about growth or expansion — they’re thinking about making it through the next quarter. This means they’re likely to freeze hiring, lay off employees, and cut costs wherever they can. In other words, they’re battening down the hatches and preparing for a storm.
This has a ripple effect. When one company freezes hiring, it puts more pressure on other companies in the industry. Top talent becomes scarcer, and the remaining companies have to fight harder (and pay more) to attract and retain the best people. This increases labor costs across the board, which can stifle growth and innovation in the entire sector.
Moreover, let’s not forget the psychological impact. When news breaks that companies are running out of money and cutting jobs, it creates a climate of fear and uncertainty. People are less likely to leave their current jobs for new opportunities, which means less movement in the job market and fewer opportunities for everyone.
Finally, this situation also impacts new graduates and entry-level workers the hardest. With fewer jobs available, these newcomers to the workforce face an uphill battle to get their foot in the door. This can lead to a ‘lost generation’ of workers who start their careers on the back foot, potentially impacting their earnings and career trajectories for years to come.
So, in conclusion, this financial drought for private companies isn’t just bad news for them; it’s a storm cloud hanging over the entire job market. It means fewer jobs, higher labor costs, and a more challenging environment for everyone looking to grow their career. In the world of business, cash isn’t just king — it’s the whole damn kingdom.
Brian Fink is the author of Talk Tech To Me. He takes on the stress and strain of complex technology concepts and simplifies them for the modern recruiter. Fink’s impassioned wit and humor tackle the highs and lows of technical recruiting with a unique perspective — a perspective intended to help you find, engage, and partner with professionals.
