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Recession | What is The Recession ? | Why do It occurs? | Ways To Prevent Recessions.

1. What is the Recession ?

A Recession is a period when the business and industry of a country are not successful

A recession is  defined as the declining economic growth of companies or organizations or the Country or sometimes the whole globe. A recession is a significant decline in economic activity that lasts for months or even years. Recession causes unemployment, falling retail sales, and falling of shares and stockholders for a certain period. 

Recessions are considered an Inevitable part of business and organizations, during this period Whole economy Struggles, Some Recessions occurs for cost cuttings and tax Savings, generally, it is done once every 6-7 years.

As per Some Sources, the Recession in Financial Year 2023 is Inevitable.


In the early stage of 2023, Many Tech Giants laid off Thousands of Employees Even Employees having more than 15 plus years of Experience are laid off by big Tech giants like Google, Microsoft, Twitter, Facebook, Amazon, Salesforce, any many more . For Various Reasons. While Apple Pay Cuts the salaries of Employees While as per news even Apple announced it is lowering CEO Tim Cook’s annual compensation by more than 40% in 2023. Some Sources are Claiming that Till Now overall Number of layoffs are approximately 2 lakh and many more will going to happen in this Year.

While TCS and Wipro have Not Announced any layoffs yet.

Fortunately, layoffs aren’t the only way to cut labor costs. Companies should consider hour reductions and performance pay like Apple is doing. 

Although an economy can show signs of weakening months before a recession begins, the process of determining whether a country is in a true recession (or not) often takes time. A recession is short, but its impact can be long-lasting.

Campus placements are said to take a hard hit during this phase. Campus placements are yearly rituals of companies to hire more workforce for their ever-increasing requirements followed by resignations. However, during an economic crisis cost cutting reduces the chances of new recruitment. 


2. Why do Recessions Occur ?

When demand peaks and starts to decline, the excessive supply of goods and services that aren't consumed can lead to a recession, with companies producing less and downsizing while people lose purchasing power and consumption continues to fall.

Recessions can be caused by many Different Reasons and elements like Financial Crises High Supply and Less Demand, cost Cuttings, loss of consumer confidence, high-interest rates, and a stock market crash many of the Big Companies are facing Loses in this Financial Year. Even the Big Sharks like Lenskart had reported a profit in the 2021 financial year but dropped into a loss of Rs 102 crore in the 2022 fiscal as per some sources.

It is also fact that even Emerging of AI(Artificial Intelligence) is Causing Recessions in some Field Areas Because of the Automation of some Works and it Capturing the Seats of the Employees which were supposed to be Appointed for certain work now replaced  by AI. The Basic Example of AI Capturing the Place of Employees is Ticket machines on the Railways and Metros.

In the Covid times due to a sudden increase in demand the Bulk Employees where Hired and now they are being Fired for Decreasing in Sudden demand, as a result, Companies are Facing some much losses and need to do cost cuttings, Sometimes it's also noticed That some Employees are Overpaid as per their skills and the amount they are getting is not deserving because many other employees are Also Available with More Skills and more hard work which could also be reasons for Recessions.

Campus placements are said to take a hard hit during this phase. Campus placements are yearly rituals of companies to hire more workforce for their ever-increasing requirements followed by resignations. However, during an economic crisis cost cutting reduces the chances of new recruitment. 

An increase in layoffs , another key indicator of a recession and  is also being felt across the country as many companies, particularly in the tech sector,  have announced layoffs in recent months. And if you ask most people, they'll say it's become undoubtedly harder to make ends meet. 

At least one poll conducted in June finds a majority of Americans, or 58%, believe we are in a recession.


3. What are the Ways to prevent yourself from Recessions ?

  • Save an Emergency Fund.
  • Have Additional Income.
  • Plan more, panic less. 
  • Freelance on Your skills.
  • Seek a second income sources.
  • Plan for unexpected expenses.
  • Plan for Expenses and Daily Needs.
  • don't Over-Expense.
  • Try to avoid which is not that much Required and can be Post-pond.

There are many everyday habits that you can implement to protect yourself ahead of time from the getting affected of a potential economic downturn or Recession. Having an emergency fund, strong credit, multiple sources of income, and living within your means are all important tools that can help you get through a rough patch in the economy in one piece financially.


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