San Francisco, United States: Amazon confirmed on Thursday that it is laying off staff, after days of rumors that the e-commerce behemoth would become the latest tech giant to unleash a large-scale redundancy plan amid a souring economic environment.
The mass layoffs that began in Amazon’s corporate ranks this week will extend into next year, CEO Andy Jassy said Thursday.
In a note sent to employees, Jassy said the company told workers in its devices and books divisions about layoffs on Wednesday. He said it also offered some other employees a voluntary buyout offer.
“I’ve been in this role now for about a year and a half, and without a doubt, this is the most difficult decision we’ve made during that time (and, we’ve had to make some very tough calls over the past couple of years, particularly during the heart of the pandemic),” Jassy wrote in the memo.
“The economy remains in a challenging spot and we’ve hired rapidly the last several years,” wrote chief executive Andy Jassy in an internal memo published on the Amazon website.
Seattle-based Amazon, which has been cutting costs in various areas of its business in the past few months, is undergoing an annual review process to figure out where it can save more money. Jassy said this year’s review is “more difficult” due to the economic landscape and the company’s rapid hiring in the last several years.
Other tech companies — many of which had gone on hiring binges in the past few years — have also been trimming their workforce amid concerns about an economic slowdown. Among others, Facebook parent Meta said last week it would lay off 11,000 people, about 13 per cent of its workforce. And Elon Musk, the new Twitter CEO, has slashed the company’s workforce in half this month.
Jassy did not confirm the figure, but he said that the process had begun and would continue early next year.
The first teams affected were those dealing with the brand’s electronic devices such as Kindle e-readers. Physical shops will also be impacted.
“There will be more role reductions as leaders continue to make adjustments,” he wrote.
“Those decisions will be shared with impacted employees and organizations early in 2023. We haven’t concluded yet exactly how many other roles will be impacted.”
Jassey said that in the roughly 18 months he has been CEO, “without a doubt, this is the most difficult decision we’ve made.”
He continued: “It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions, and responsibilities whose lives will be impacted.”
A reduction of 10,000 employees would represent a little less than one percent of the group’s total payroll, which had 1.54 million employees worldwide at the end of September, not counting seasonal workers who are recruited during periods of increased activity like the Christmas holidays.
The layoffs follow an aggressive hiring spree.
With business booming due to the coronavirus pandemic as cooped up people turned in earnest to online shopping, Amazon doubled its workforce from the first quarter of 2020 to 1.62 million employees two years later.
But with the economy souring, two weeks ago Amazon announced a hiring freeze and its workforce has already decreased compared to the beginning of the year.
The US retail giant saw its net profit fall by 9 per cent year-on-year in the third quarter.
And for the current quarter, the crucial holiday season, the group expects growth to be anemic by its standards, between 2 and 8 per cent year-on-year.
Many technology companies that had been hiring heavily during the pandemic have recently announced job cuts, including Meta, Twitter, Stripe and Lyft.
With inputs from agencies
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