Amazon’s latest indication that a tech-sector slump is becoming more pronounced is the layoff of over 18,000 workers. This makes it the company’s biggest corporate workforce cut.
According to CEO Andy Jassy’s memo to employees on Wednesday, the decision was made following the company’s yearly planning process. The layoffs were first predicted to affect around 10,000 individuals. They began last year. The corporate ranks of the company, particularly Amazon’s retail division and HR departments like recruiting, are where the cut is most severe.
Even though Amazon has been grappling with the prospect of layoffs for months, the overall total has risen. This indicates that its outlook has worsened. Among the other big tech firms that have made similar cuts is Facebook. Salesforce Inc. announced its acquisition on Wednesday. Around 10% of its personnel will be dismissed, and its real estate holdings will be decreased, according to announced intentions.
The Amazon Layoff Is the Biggest in The Industry as The Giant Shifts Core Business
Amazon investors responded favorably to the latest belt-tightening moves. They hope these moves will help the e-commerce firm increase earnings. After the Wall Street Journal first reported on the plan, the shares climbed nearly 2% in late trading.
Amazon has a significantly bigger workforce than Silicon Valley competitors. Accordingly, eliminating 18,000 employees would be the biggest reduction for technology corporations during the current slowdown. As of the end of September, it had more than 1.5 million workers, meaning the latest layoffs would affect roughly 1% of the workforce.
According to a representative, Amazon employed roughly 350,000 workers globally at the time.
As consumers reverted to pre-pandemic habits at the end of last year, the world’s biggest internet retailer adjusted to a significant drop in e-commerce expansion. Amazon’s retail division has postponed warehouse openings and layoffs. It then started making cuts by broadening the freeze to the company’s corporate staff.
Teams working on a telehealth service, a delivery robot, and a children’s video-calling device are among the projects that Jassy has eliminated or trimmed.
How the E-Commerce Giant Deals with Excess Capacity Amidst the Decreased Demand
In addition, the Seattle-based corporation is attempting to match excess capacity with cooling demand. According to individuals familiar with the situation, one effort involves trying to sell additional cargo space on its planes.
Amazon’s business is now seeing parts of it level off. It began as an online bookstore. Nevertheless, it continues to invest in cloud computing, advertising, and video streaming.
Amazon’s Devices and Services business, which includes the Alexa digital assistant and Echo smart speaker, was hit hardest by the first wave of layoffs. According to the company’s chief, Amazon was committed to the voice assistant, who told Bloomberg last month that layoffs in the division were fewer than 2,000 people.
