Buy Losses, Vacancies and Technical Decline: The Business and Investment Stories You Need to Know This Week

Are you dealing with the lost week? Here’s the weekly Globe’s most important business and investment stories, insights and analysis from the experts, stock tips, portfolio strategies and more.

Don’t panic, but a recession could ‘technically’ come.

The U.S. economy unexpectedly shrank for the second quarter in a row, sparking signs of a technical recession if not outright. As Jason Kirby writes, gross domestic product (GDP) will shrink at a 0.9-percent annualized rate, shrinking the U.S. economy to 1.3 percent in the first half of 2022. While a two-quarter recession is considered an informal sign of recession, it is not an official definition, and many economists say recession talk is premature due to low unemployment.

Beware of shop cuts, losses and middlemen

Ottawa-based tech giant Shopify made headlines this week after it cut 10 percent of its workforce, nearly 1,000 people, writes Temur Durrani. Most of those affected were in sales, accounting and recruiting, with this new round of layoffs following 50 job cuts in early July. CEO Tobias Luttke apologized for overestimating e-commerce growth, adding that Shopify is hiring more people to meet expected demand, writing in a memo to its 10,000 employees that “I got this wrong.” A day later, Shopify posted a huge second-quarter net loss of US$1.2-billion, and warned of more job losses ahead as it faces a slowdown in e-commerce. Earlier this month, Shopify announced that it was delaying compensation improvements for disgruntled employees and canceling internship and job offers for those starting jobs in the fall due to falling stock prices.

Retail returns: E-commerce growth is slowing.

After all, we love going to the mall. As pandemic restrictions are lifted, more people are returning to old habits — trying on clothes, trying on mattresses, browsing the shelves — and ditching online shopping, as Shopify’s layoffs show. Matt Lundy writes that Canadians spent $3.5-billion on e-commerce orders in May, down 23 percent (or about $1-billion) from a year ago, when parts of the country were still on lockdown. It’s a similar story in the US, but don’t call it a riot just yet.

Should you stay (at your job) or should you go (for more money)? It depends on who you ask

Canada’s record labor shortage for more than a year has led to huge wage increases for those looking to switch jobs. But with a potential recession on the horizon and some tech companies cutting back, some workers are starting to think it’s a good idea to jump ship for more cash. As Erica Allini reports, the latest Statistics Canada data shows employers were actively looking to fill more than one million open positions in early May, up 42.5 per cent from the same month last year. So while there are signs of a slowdown, workers who haven’t seen a pay raise in years and whose wages have fallen significantly below inflation and market value can still increase their compensation significantly by switching jobs.

The culprit of the Rogers outage: a coding error

Weeks after the Rogers outage that knocked out wireless, cable and Internet service across the country, the telecommunications company finally determined the cause. In a document made public by the Canadian Radio-television and Telecommunications Commission, Rogers said a code error occurred during an upgrade to the core infrastructure supporting the company’s wireless and broadband networks. As Aleksandra Posadzki reports, the error caused events that even the company’s technicians had trouble pinpointing, and it took the team all day to restore the network.

Worried about your huge loan? Here’s what you need to do

We’re in a period of mental adjustment to home ownership, moving away from the idea that a large mortgage is a huge burden because you own assets that appreciate quickly. Coupled with the high cost of living and rising debt payments, young homeowners today are under serious financial stress – and falling house prices mean there’s no moral victory for all this pain. So what should homeowners do under the pressure of rising mortgage costs? Rob Carrick recommends thinking in $100 increments in terms of the financial steps you take to save money. “We are beyond the lattice here,” he wrote. A storm cloud is brewing over Canada’s real estate market — and things could get worse for borrowers.

Now that you’re all caught up, get ready for next week with the Globe Investment Calendar.

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