As a cost-cutting measure, Amazon plans to eliminate more than 18,000 workers, the greatest number in the company’s history.
The online giant, which employs 1.5 million people worldwide, did not specify which nations would be affected by the job cuts but stated that Europe would be included.
The majority of job reductions will occur in its consumer retail and human resources divisions.
Andy Jassy blamed the “uncertain economy” as the reason for the layoffs, stating that the company had “hired rapidly over the course of several years.”
In a note to staff, he stated, “We do not take these decisions lightly or underestimate how they may affect the lives of people affected.”
Amazon slashes 18,000 positions
He stated that the announcement had been moved up due to one of the company’s workers disclosing the news to the media.
“Long-lasting businesses experience numerous periods. They are not in a major expansion mode annually “he noted.
Amazon’s sales have slowed since the epidemic when people were bored at home and spent a lot of money online.
A strong combination of a decline in advertising income as a result of businesses’ efforts to conserve money. And a decline in consumer spending as a result of the cost of the living problem is severely impacting IT companies.
Other major technology companies, including Meta, the owner of Facebook, Instagram, and WhatsApp. And cloud-based commercial software provider Salesforce, have also lately announced significant layoffs.
Amazon has already declared that it will scale back on projects such as the Echo (also known as Alexa), and delivery robots. Which were nice-to-haves but not profitable.
Anecdotally, there is a trend in Silicon Valley for companies to hire and retain brilliant employees at appealing pay. Even if they are not immediately required, to prevent them from joining a competitor. This culture is a luxury that large IT companies can no longer afford to support.
On January 18th, Amazon employees affected by the layoffs are anticipated to be informed.
The move follows the technology giant’s announcement last year that it will shrink its workforce without specifying how many positions would be eliminated.
A strong combination of a decline in advertising income as a result of businesses’ efforts to conserve money. And a decline in consumer spending as a result of the cost of the living problem is severely impacting IT companies.
“More suffering lies coming”
Warning that it had overhired during the pandemic, the corporation had previously ceased hiring new employees. And suspended several warehouse expansions.
It has also taken efforts to shut down portions of its business, including the cancellation of personal delivery robot initiatives.
Ray Wang of the Silicon Valley research firm Constellation Research told, “Before the epidemic. IT companies would typically lay off between 1 and 3 percent of their personnel.”
Wedbush Securities’ Dan Ives expects Amazon will see “more suffering” as consumers tighten their purse strings.
Industry-wide reductions
The global IT industry is shedding tens of thousands of jobs due to sluggish sales. And rising fears of an economic downturn.
In November, Facebook owner Meta stated it will reduce its employment by 13 percent.
The first mass layoffs in the history of the social media company will result in 11,000 employees. Out of a total of 87,000, losing their employment.
Mark Zuckerberg, chief executive officer of Meta, described the layoffs as “the most challenging changes in Meta’s history.”
The news followed massive layoffs at Twitter. Which eliminated over half of its workforce when billionaire Elon Musk purchased the company in October.
Earlier than November, Amazon began laying off employees, according to LinkedIn posts by employees who were affected.
Posts from employees of Amazon’s Alexa virtual assistant business, Luna cloud gaming platform subsidiary. And Lab126 – the unit behind the Kindle e-reader.
