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Amazon to cut over 18,000 jobs as part of cost savings

By Nagasunder in Amazon News, posted January 5, 2023

Amazon's CEO says the company plans to cut more than 18,000 jobs in order to cut costs.

The job cuts represent around six percent of the company's approximately 300,000-person corporate workforce.

He added the message was brought forward "because one of our teammates leaked this information externally".

Amazon is the latest major technology company to announce major layoffs as customers cut back on spending due to the cost of living crisis.

The online giant employs 1.5 million people around the world but did not say which countries the job cuts would hit.

But it did confirm they would include roles Europe.

Most of the job losses will come from its consumer retail business and its human resources division.

In a message to staff, Amazon's chief executive Andy Jassy said: "We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support," Amazon's chief executive Andy Jassy said in a message to staff.

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.

He also said the "majority of role eliminations" would be in the Amazon Stores operations and its People, Experience, and Technology team.

Amazon announced in November it would begin a round of layoffs in order to cut costs, but did not specify how many jobs would be lost.

At the time, US media reported that the company would eliminate approximately 10,000 jobs.

The company had already implemented a hiring freeze and halted some warehouse expansions after warning that it had over-hired during the pandemic.

It has also taken steps to close some aspects of its business, including the cancellation of 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.

Amazon is the latest in a string of tech behemoths to announce layoffs in recent months.

A potent combination of a drop in advertising revenues due to businesses looking to save money and consumers spending less as the cost of living crisis bites is wreaking havoc on tech firms.

Their heyday during pandemic lockdowns, when online activity skyrocketed while people were bored at home, has also passed.

Amazon has already announced it is scaling back on projects such as the Echo (better known as Alexa) and delivery robots, which were nice-to-haves but were not profitable.

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.

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 declared that it would cut 13 percent of its workforce.

The first mass lay-offs in the social media firm's history will consequence 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 trailed major layoffs at Twitter, which cut about half its staff after multi-billionaire Elon Musk bought the firm in October.

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Amazon began 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 comprised those from employees in Amazon's Alexa virtual assistant business, Luna cloud gaming platform division and Lab126 - the operation behind the Kindle e-reader.

Source: BBC

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