Amazon will shed more than 18 000 jobs to cut costs
Tweet
Amazonās CEO announced that the tech giant plans to lay off over 18,000 workers as it cuts costs. He makes this announcement at a time when an Amazon employee has leaked the information to the public. Amazon has a corporate workforce of 300,000 members, out of which almost 6% will be affected by this round of layoffs. This is the latest announcement of layoffs in the tech sector since the start of the year.
Many big tech businesses laid off people starting last year as customer spending dwindled amid the high cost of living crisis in the US. Andy Jassy tells his staff that the company is working to support the affected staff. They are planning to offer packages that include a separation payment, transitional health insurance benefits, and external job placement support. Amazon warned its employees about the possibility of a mass layoff last year without naming an exact number.
Jassy does not specify the locations of the staff members affected by this latest round of layoffs. But he announced that the business will talk to organizations representing employees, "where applicable in Europe." According to the Amazon CEO, a majority of the cut-off jobs will be in Amazon Stores operations and its People, Experience, and Technology team.
There will be more bad news for Amazon workers in the coming days
Amazon announced last November that they will lay off people to reduce expenses but did not specify a figure. US media predicted a job cut of 10,000 at the time, based on the information they had received from the company. Amazon has already frozen its hiring. The tech giant warns employees that they have overhired talent during the pandemic years, as it halts some of its warehouse expansions.
Certain parts of the business have also been shut down. Amazon canceled several projects, including the personal delivery robot on which they were working. According to Jassy, it has been difficult to review Amazonās business considering the uncertainty of the economy. The fact that the company has had rapid hiring policies for the last several years does not help the case either. As the CEO states, "Companies that last a long time go through different phases. They're not in heavy people expansion mode every year."
The times are tough for many tech businesses
It isnāt an easy time of the year to be a US tech giant. Many big tech businesses are feeling the strain the US economy has put them through in the last few months. Tech firms are facing many issues, among which the following are prominent:
- Reduction in advertising revenues due to lowered consumer spending
- The increased cost of living affects the spending potential of customers
- Higher costs of operation for tech businesses
- Rising interest rates as the Federal Reserve battles inflation
Tech businesses had a big boom when consumers turned to online shopping during the pandemic lockdowns. The online activity of customers is not skyrocketing anymore as economies across the world reopen. Amazon had to axe spending on several of its projects, including the Echo (also known as Alexa), due to lower profits.
Silicon Valley firms had a habit of hiring and retaining impressive tech talent and offering them attractive salaries just so the tech businesses could stop them from working for rivals. As the economy is still in turmoil, many tech businesses seem to be leaving this tradition behind as a luxury they can no longer afford. Ray Wang of Constellation Research says that tech companies would only axe the bottom 1% to 3% of their workforce before the pandemic.
Amazon workers are not the only tech employees being laid off
Globally, tens of thousands of tech workers are losing their jobs as sales slow down amid the global economic crisis. Just last November, Meta announced a layoff of 13% of its staff. 11,000 of the social media giantās 87,000-strong workforce will lose their jobs in this round of layoffs. Following this announcement, we saw another similar move from Twitter, where the new CEO cut off more than half of its staff.
PREVIOUS ARTICLES
The future of remote work in America
How to highlight your management style on a resume Part 2