Synopsis: Amazon.com Inc. plans to cut 10,000 jobs, the most ever at the e-commerce behemoth, as it braces for slower growth and a possible recession.
Amazon’s Devices and Services group, which makes its consumer electronics and Alexa, is particularly vulnerable to downsizing following years of frantic expansion. (Image source: AP)
Largest-ever layoffs by Amazon
Amazon.com Inc. plans to cut 10,000 jobs, the most ever at the e-commerce behemoth, as it prepares for slower growth and a possible recession. According to people familiar with the situation, the layoffs will most likely target Amazon’s devices group, which is responsible for the Echo smart speakers and Alexa digital assistant, as well as its retail divisions and human resources.
As part of the company’s annual planning process, teams are deciding where to cut headcount, according to the people, who requested anonymity to discuss a confidential matter.
In the face of slowing sales growth and economic uncertainty, CEO Andy Jassy has pledged to streamline operations. Last month, the Seattle-based company predicted that the holiday season would be the slowest in its history, causing Wall Street to panic and the stock to plummet.
Some long-term Amazon employees, speaking on the condition of anonymity to discuss an internal matter, said the recent cost-cutting has been the most severe they’ve ever seen.
In New York, the stock was down about 1.4%. The planned layoffs were first reported by the New York Times.
The world’s largest online retailer has spent much of this year adjusting to a sharp slowdown in e-commerce growth as consumers reverted to pre-pandemic habits. Amazon delayed warehouse openings and froze hiring in its retail division before extending the freeze to the rest of the company. In recent weeks, Jassy has increased his emphasis on finding cost-cutting opportunities among experimental and unprofitable businesses. Among other projects, the company shut down teams working on a telehealth service, a delivery robot, and a video-calling device for children.
At the end of September, The tech giant employed 1.54 million people, the vast majority of whom were hourly employees who packed and shipped items in warehouses or worked in Whole Foods Market and other retail stores. Its corporate workforce is concentrated in Seattle, a growing Washington-area campus, the San Francisco Bay Area, Los Angeles, Austin, Texas, and Boston.
Following years of frantic expansion, Amazon’s Devices and Services group, which manufactures consumer electronics and Alexa, is particularly vulnerable to downsizing. The company’s voice-activated devices have sold well, but they haven’t evolved into the must-have shopping portal that its creators envisioned. Smart speakers frequently end up in people’s closets.
To survive the dotcom bust of the early 2000s, Amazon laid off thousands. Since then, the company has gone through periods of largely self-imposed austerity to combat corporate bloat, sometimes halting hiring on large teams for months at a time.
Amazon has also closed or scaled back a number of initiatives in recent months, including Amazon Care, a service that provided primary and urgent health care but did not attract enough customers; Scout, a cooler-sized home delivery robot that employed 400 people, according to Bloomberg; and Fabric.com, a subsidiary that sold sewing supplies for three decades.
From April to September, it reduced its workforce by nearly 80,000 people, primarily through high attrition among hourly employees.
In September, Amazon halted hiring in several smaller teams. It stopped hiring for over 10,000 open positions in its core retail business in October. It froze corporate hiring across the company, including its cloud computing division, two weeks ago for the next few months.
Not only Amazon, but most tech giants are also opting for layoffs, freezing new hires. Meta, Facebook’s parent company, said that it will let go of nearly 11,000 employees. As the world economy heads into recession with unchecked inflation and central banks across the world raising interest rates, more technology companies are likely to follow suit. Here, we have put together some of the biggest layoffs and hiring freezes in the tech industry.
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