Amazon’s move to trim down its workforce is not surprising as several other tech giants including Meta, Twitter, and Google are bracing for a potential economic downturn.
Amazon is planning to let go of around 10,000 employees as soon as this week, according to some media reports. If materialized, this would be the company’s largest job cut ever that is coming at a time when several companies are gearing up for an expected recession soon.
According to a report by The New York Times, the trimming will happen in the corporate and technology jobs and would focus on Amazon’s device organization, including employees focused on the company’s voice assistant Alexa, alongside cuts in the retail division and human resources. These 10,000 layoffs will likely happen gradually team by team rather than all at once. This “would represent roughly 3 percent of Amazon’s corporate employees and less than 1 percent of its global workforce of more than 1.5 million, which is primarily composed of hourly workers,” The NYT reported.
The Wall Street Journal, citing Chief Executive Andy Jassy, reported that Amazon is looking to streamline operations and is closely evaluating its Alexa and other businesses that have not been profitable. “In some recent years Amazon’s devices unit, which includes Alexa, had an operating loss of more than $5 billion a year,” The WSJ added. The tech giant has intimated employees of other unprofitable divisions to look for jobs elsewhere in the company amid plans of suspending/closing such operations.
Reports suggest that Amazon reaped the fruits of an upsurge in online shopping during the Covid-19 pandemic. It went on to utilise this windfall in expanding several teams and investing heavily in the business. But the tech giant’s growth slowed down as the global economy emerged from the pandemic. The company last month projected a slowdown in sales growth for the upcoming holiday season as “people’s budgets are tight, inflation is still high, energy costs are an additional layer on top of that caused by other issues,” said Amazon Chief Financial Officer Brian Olsavsky, as reported by Reuters.
Amazon’s move to trim down its workforce is not surprising as several other tech giants including Meta, Twitter, Google, and several others are bracing for a potential economic downturn. Last week, Instagram, Facebook, and WhatsApp’s parent company, Meta, announced to fire more than 11,000 employees, or almost 13% of its workforce in its biggest round of layoffs ever. Meta further announced that it has frozen new hiring.
Earlier this month, Twitter laid off roughly half of its 7,500 workforce under the leadership of new boss Elon Musk, who had previously given the pink slip to many senior executives including the now-former chief executive officer Parag Agrawal. Google Chief Executive Officer Sundar Pichai said in an email to employees in July that the company will slow the pace of hiring through 2023 amid the mounting global economic headwinds. The statement came after Google reported a slower pace of year-on-year growth in the first quarter.
