This is correct.

The hand-waving is "tech overhiring"; it's an inaccurate meme.

The reality is copycat effect, just like the late 21, early w2 "price increases" across all economic sectors, which fueled the inflation fire. Companies with material and logistics components experienced greater costs during and following the pandemic. That chewed up their margins, so many raised prices to maintain those margins.

Many/most who didn't even experience cost increases of any kind copied the herd raising prices as a way to inflate revenues. And most got away with it because "everyone else is doing it." Especially when the bulk of the market is making the same move, the ones that didn't "need" to raise prices exploited the opportunity anyway. As such, 9% inflation.

And now that the Fed has applied a vise grip Federal Interest Rate, many companies are now facing unfavorable borrowing costs; so they close ranks and ride out the cooldown, while also preparing for a Recession, should it manifest fully.

And since the consumer market is dealing with higher costs but suppressed, stagnant wages, spending is cooling off.

Finally, the last link in the chain reaction is companies looking for additional cost cutting avenues. Since growth is largely on hold due to revenues shrinking and borrowing costs becoming unprofitable, they turn inward and cut labor. Fringe or luxury products or projects are suspended (or shelved) and the staff is shuffled to keep the most vital members (and/or favoritism). And even firms that don't need to adjust labor costs are cutting labor preemptively to maintain margins since revenues are down across the board.

Everyone is at risk as long as the Fed maintains the high rates, which has been a necessity of evil to reign in the decades of low rate borrowing and growth all while wages failed to keep pace.

When inflation reaches 7-9% while wages **rarely surpass 1-4% annually, if that that's a disparity and it has been out of control for 20+ years.