Previously, it was anticipated that roughly 10,000 workers would be impacted by Amazon’s employment cuts, which started last year.
Amazon is firing more than 18,000 workers, which is a much higher amount than originally anticipated, in the latest indication of a worsening technological slump. In a memo to employees on Wednesday, Chief Executive Officer Andy Jassy made the announcement and said that it was in line with the company’s yearly planning procedure. Previously, it was anticipated that the layoffs, which started last year, would affect around 10,000 individuals. The company’s corporate ranks, primarily Amazon’s retail segment and human resources duties like recruiting, are where the reduction is centred.
He declared, “Amazon has survived unstable and challenging economies in the past, and we will continue to do so. “With a stronger cost structure, these improvements will enable us to pursue our long-term opportunities.”
Although Amazon has known that it employed too many workers during the pandemic, the possibility of layoffs has been looming over the firm for months, and the rising number shows that things are becoming worse for the company. It makes significant savings alongside other tech behemoths. Early on Wednesday, Salesforce Inc. disclosed plans to downsize its real estate holdings and lay off around 10% of its workers.
Investors in Amazon responded favourably to the latest cost-cutting measures, anticipating a boost to profits at the online retailer. After the Wall Street Journal broke the news of the plan, the shares increased by over 2 percent in late trade.
The biggest layoff for tech businesses during the present slowdown would be 18,000 employees, but Amazon also has a much larger workforce than its Silicon Valley competitors. At the end of September, it employed more than 1.5 million people, so the most recent layoffs would account for around 1% of the total.
A representative for the business estimated that Amazon employed about 350,000 corporate workers worldwide at the time the company was contemplating its layoffs in November.
The biggest online retailer in the world had to spend the final quarter of 2017 adjusting to a dramatic slowdown in e-commerce growth as consumers resumed their pre-pandemic behaviours. Amazon paused hiring for its retail division and postponed warehouse openings. After extending the freeze to the corporate personnel of the business, it started making cuts.
Jassy has shut down or scaled up unprofitable, experimental ventures like those developing heath services, delivery robots, and kids’ video calling equipment.
Additionally, the Seattle-based business aims to match cooling demand with available capacity. According to those with knowledge of the situation, one strategy entails attempting to sell extra capacity on its cargo flights.
Parts of Amazon’s business, which started as an online bookstore, are levelling off. However, it keeps making investments in its video streaming, advertising, and cloud computing businesses.
The initial round of layoffs hit Amazon’s Devices and Services division hardest, which among other things creates the Echo smart speaker and Alexa personal assistant. The unit’s chief said to Bloomberg last month that less than 2,000 people had been laid off and that Amazon was still dedicated to the voice assistant.
The human resources department of the business offered buyouts to a few recruiters and staff members. Jassy informed staff members in November that the HR and retail teams might experience additional layoffs in 2023.
In the memo sent out on Wednesday, Jassy stated that the company would offer affected employees severance pay, temporary health coverage, and job placement. He also reprimanded a worker for sharing the information, maybe alluding to the Wall Street Journal article. On January 18, he said, the business plans to start talking about the changes with affected personnel.
Companies that endure for a long time go through many phases, according to Jassy. “They’re not constantly expanding their population heavily.”