Amazon plans to lay off 10,000 people starting this week

Amazon plans to lay off approximately 10,000 people in corporate and technology jobs starting as soon as this week, people with knowledge of the matter said, in what would be the largest job cuts in the company’s history.

The cuts will focus on Amazon’s devices organization, including the voice-assistant Alexa, as well as at its retail division and in human resources, said the sources.

The total number of layoffs remains fluid. But if it stays around 10,000, that would represent roughly 3% of Amazon’s corporate employees and less than 1% of its global workforce of more than 1.5 million, which is primarily composed of hourly workers.

Amazon’s planned retrenchment during the critical holiday shopping season, when the company typically has valued stability, shows how quickly the souring global economy has put pressure on it to trim businesses that have been overstaffed or underdelivering for years.

Amazon would also become the latest technology company to lay off workers, which only recently it had been fighting to retain.

This year, the e-commerce giant more than doubled the cap on cash compensation for its tech workers, citing “a particularly competitive labor market.”

Changing business models and the precarious economy have set off layoffs across the tech industry.

The pandemic produced Amazon’s most profitable era on record, as consumers flocked to online shopping and companies to its cloud computing services.

Amazon doubled its workforce in two years, and funneled its winnings into expansion and experimentation to find the next big things.

But earlier this year, Amazon’s growth slowed to the lowest rate in two decades, as the bullwhip of the pandemic snapped.

The company faced high costs from decisions to over-invest and rapidly expand, while changes in shopping habits and high inflation dented sales.

Last week, Amazon executives met with institutional investors, just as its stock sank to its lowest level since the early days of the pandemic, erasing US$1 trillion in value since Andy Jassy took over as CEO last year.

Jassy, who previously ran Amazon’s lucrative cloud computing business, has been closely scrutinizing businesses to trim costs quickly.

He initially pulled back on a warehouse expansion that was supercharged during the pandemic, then moved to other parts of the company.

From April through September, it reduced head count by almost 80,000 people, primarily shrinking its hourly staff through high attrition. Amazon froze hiring in several smaller teams in September.

In October, it stopped filling more than 10,000 open roles in its core retail business. Two weeks ago, it froze corporate hiring across the company, including its cloud computing division, for the next few months.

That news came so suddenly that recruiters did not receive talking points for job candidates until almost a week later, according to a copy of the talking points seen by The New York Times.

Amazon’s retail business, which covers its physical and online retail business and its logistics operations, has been under strain after the surge of demand and breakneck expansion during the pandemic.

The company has said it has pulled back expansion plans, and has told investors it sees uncertainty with consumers.

“We’re realistic that there’s various factors weighing on people’s wallets,” Brian Olsavsky, the finance chief, told investors last month. He said the company was unsure where spending was heading, but “we’re ready for a variety of outcomes.”

 

SOURCE: NEWS AGENCIES