How Brexit Will Impact Tech
The Brexit vote has had a major impact on technology companies within the UK – and on North American companies that have recently set up shop.
With future expansion plans already in the works and numerous facilities all over the UK, Amazon will take one of the biggest hits.
Difficult Times Ahead
Earlier this year, Amazon announced plans to expand its grocery delivery service within the United Kingdom. The company already delivers fresh produce to thousands of UK addresses regularly.
Amazon had also recently announced plans to build data centers in the UK (slated for 2017), which would have brought the total number of Amazon facilities in the country to 12.
Not only will Amazon have to think about the flow of goods that may now cease to exist within the UK, the company will also have to rethink its hiring strategy. The Bezos empire is built on immigrant workers and low wages – two things that may be hard to continue now that it may become a lot harder for immigrants to live and work in the UK.
A Possible Win for Grocers
When Amazon originally announced plans to increase the company’s Fresh line, grocers within the UK felt the cool shadow of the billion dollar company quickly. Grocers were already under immense pressure by bigger low-cost brands like Aldi, and Amazon simply added to the threat of better and cheaper food for Prime subscribers.
If Amazon does pull out of the UK, grocers that once thrived within the country may do so again. There’s likely to be an impact on bigger North American grocery chains as well (like Aldi) that may have to exit the country. For smaller grocers, watching companies like Amazon leave may not be a bad thing. For Amazon and its many employees across the UK, the Brexit news doesn’t bring with it much optimism.
Additional Tech Sector Issues
So far, TransferWise (foreign exchange service) and DueDil (data company) have publicly stated that they are looking to move to a different country. This has caused major panic in the UK tech world.
However, many leading entrepreneurs within the tech community in the UK have asked both companies and employees to remain calm — one company (Atomico) even went so far as to state, ‘Keep Calm and Code On.’ Still, ‘texit’ (as the media is calling it) is a possible outcome of the recent vote.
The tech startup scare comes from the fact funding and grant dollars may run short. Additionally, immigrant workers may have a difficult time working in the UK going forward.
Amazon is not the only North American company that will be drastically impacted by Brexit – Apple, SalesForce, and various other major companies currently have offices in the UK. Many of those companies are expected to close up shop within the UK shortly or cut back on expansion plans until things are settled within the country (which could take some time).