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Amazon to shed over 18,000 jobs as it cuts costs

Amazon is the latest big technology firm to unveil major layoffs as the cost of living crisis sees customers cut back on spending

Amazon is planning to cut more than 18,000 roles as it reduces costs, the technology giant’s boss says.

The job cuts amount to around 6% of the company’s 300,000-strong workers.

Andy Jassy added that the announcement was brought forward “because one of our teammates leaked this information externally”.

Amazon is the latest big technology firm to unveil major layoffs as the cost of living crisis sees customers cut back on spending.

In a memo to staff, Mr Jassy said the majority of job losses would come from its stores division as well as “people, experience, and technology” which includes human resources.

He did not specify in which countries employees will lose their jobs but it will include Europe. He said: “We intend on communicating with impacted employees (or where applicable in Europe, with employee representative bodies) starting on 18 January.

The move comes after the technology giant said last year that it would reduce its headcount without putting a figure on how many jobs would be cut.

‘More pain ahead’

In November, Amazon said it was starting a round of layoffs as it focused on reducing expenses but did not give a figure of how many jobs it would cut.

The company had already introduced a hiring freeze and halted some of its warehouse expansions, warning it had over-hired during the pandemic.

It has also taken steps to shut some parts of its business, cancelling projects such as a personal delivery robot.

Mr Jassy said in the note that reviewing Amazon’s business “has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years.”

“Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” he added.

“Prior to the pandemic, tech companies would often remove only the bottom 1% to 3% of their workforce,” Ray Wang from the Silicon Valley-based consultancy Constellation Research told the BBC.

Dan Ives from investment firm Wedbush Securities said he believes Amazon will face “more pain ahead” as customers tighten their belts.

“Amazon is seeing darker macroeconomic conditions and Jassy is ripping the band-aid off to preserve margins,” he said.

Industry-wide cuts

Tens of thousands of jobs are being shed across the global technology industry, amid slowing sales and growing concerns about an economic downturn.

In November Facebook owner Meta announced that it would cut 13% of its workforce.

The first mass lay-offs in the social media firm’s history will result in 11,000 employees, from a worldwide headcount of 87,000, losing their jobs.

Meta chief executive Mark Zuckerberg said the cuts were “the most difficult changes we’ve made in Meta’s history”.

The news followed major layoffs at Twitter, which cut about half its staff after multi-billionaire Elon Musk bought the firm in October.

Amazon started laying off staff as early as November, according to LinkedIn posts by workers who said they had been impacted by job cuts.

Posts seen by the BBC included those from employees in Amazon’s Alexa virtual assistant business, Luna cloud gaming platform division and Lab126 – the operation behind the Kindle e-reader.

 

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Source
BBC
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