Amazon reportedly planning to cut 10,000 jobs
Image credit: Reuters
Amazon is said to be preparing to lay off 3 per cent of its corporate employees, joining the list of tech giants to enforce a large-scale redundancy plan.
Amazon could "axe 10,000 workers" after economic forecasts predict slow growth, The New York Times and The Washington Post have reported, citing sources close to the matter.
The layoffs would start as soon as this week and affect as many as 10,000 people in the company’s devices organisation, retail division and human resources, in what would be the largest job cuts in the company’s history.
If confirmed, the redundancy plan would affect approximately 3 per cent of Amazon's corporate employees or 1 per cent of the company's total workforce, which employs over 1.5 million workers.
The news was surprising for some, as it has come during the critical holiday shopping season – when the company typically has valued stability – and follows an aggressive hiring spree.
The Covid-19 pandemic produced Amazon’s most profitable era on record, as consumers chose to do most of their purchases online to avoid the risk of contagion, and corporate clients flocked to the company's cloud computing services.
As a result, Amazon doubled its workforce in two years, from 798,000 employees at the end of 2019 to 1.6 million full- and part-time employees at the end of 2021.
However, in 2022 the company's growth slowed to the lowest rate in two decades. The company faced high expansion costs while rising inflation rates slowed consumers' spending habits. Two weeks ago, Amazon announced a hiring freeze and its workforce has already decreased compared to the beginning of the year.
In the last few months, Amazon has shut down a range of new services it was exploring, including its telehealth service, a roving delivery robot and a video-calling projector for kids. The company has also closed all but one of its US call centres and has been cancelling or delaying some new warehouse locations.
Although the company experienced a slight rebound in its latest quarter, it has cautioned investors that growth could weaken again, possibly falling to its lowest pace since 2001.
The New York Times said the total number of layoffs “remains fluid”, and there is no information regarding the locations that will be affected.
With this move, Amazon would become the latest technology giant to reduce its workforce. Last month, Microsoft cut around 1,000 jobs, while Meta – the parent company of Facebook, Instagram and WhatsApp – has recently revealed it will cut its global workforce by 13 per cent, letting go of more than 11,000 employees.
In the days following Elon Musk's $44bn acquisition of Twitter, the social media company laid off approximately half its workforce. Lyft, Stripe, Snap and other technology firms have also laid off workers in recent months.
This is not the first time that Amazon has laid off a large portion of its workforce. In 2001, during the dot-com crash, the company cut 1,500 jobs, which amounted to 15 per cent of its staff at the time. It also laid off a few hundred corporate employees in early 2018 after another period of rapid expansion.
Following the reports, shares of Amazon closed down about 2 per cent. Overall, the company's stock is down about 41 per cent for the year, more than the 14 per cent drop in the S&P 500, and is on pace for its worst year since 2008.
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