E-commerce giant Amazon is likely to hand over pink slips to as many as10,00as 10,000ees across its corporate and technology divisions. The development comes as the global technology industry witnesses mass layoffs owing to dwindling macroeconomic trends, and high inflation.
According to a report by The New York Times, Amazon is planning to trim 3% of its corporate workforce and less than 1% of its global workforce. As of December 31, 2021, the company had more than 1.5 million employees globally. The layoffs will be mainly focused across the e-commerce giants’ devices units that house its flagship Alexa, Echo, Kindle and other consumer products. The layoffs are touted to be the largest in the company’s corporate history.
Notably, on Saturday, Jeff Bezos, the founder of Amazon, warned of a looming recession. In an interview to a news publication, Bezos said, “The economy does not look great right now. Things are slowing down, you’re seeing layoffs in many, many sectors of the economy. The probabilities say if we're not in a recession right now, we're likely to be in one very soon."
The e-commerce giant doubled its workforce in the two years of the Covid-19 pandemic owing to an increase in sales as more shoppers moved online.
However, earlier this month, the e-commerce giant decided to freeze hiring. Beth Galetti, senior vice president of people experience and technology at Amazon, in a blog post said, “With the economy in an uncertain place and in light of how many people we have hired in the last few years, Andy and S-team decided this week to pause on new incremental hires in our corporate workforce. We had already done so in a few of our businesses in recent weeks and have added our other businesses to this approach. We anticipate keeping this pause in place for the next few months, and will continue to monitor what we’re seeing in the economy and the business to adjust as we think makes sense. In general, depending on the business or area of the company, we will hire backfills to replace employees who move on to new opportunities, and there are some targeted places where we will continue to hire people incrementally.”
Company’s weak quarterly earnings
Notably, after witnessing a boom in its sales in the two years of Covid-19 pandemic, the company’s growth declined this year. For the July-September quarter of FY23, the company reported a decline in its operating income to $2.5 billion as against $4.9 billion in the same period last year, while the company’s income plunged to $2.9 billion in the September quarter as against $3.2 billion in the same period last year.
Big tech layoffs
Over the past few months, the global tech landscape has witnessed massive layoffs and a hiring freeze amidst a looming global recession. Last week, the social media company Meta sacked 11,000 employees or 13% of its workforce. Prior to this, social media platform Twitter, which was recently acquired by Tesla CEO Elon Musk, sacked 50% of its workforce. In October, software major Microsoft fired as many as 1,000 employees, or 1% of its workforce, in the third round of downsizing. Snap, the parent company of social media platform Snapchat, sacked 20% of its workforce to restructure its business.