Amazon to cut more than 18,000 jobs as cuts escalate


Amazon.com Inc. is laying off more than 18,000 employees — a significantly higher number than expected — in the latest sign that a tech meltdown is worsening.

Chief executive Andy Jassy announced the decision in a memo to staff on Wednesday, saying it was following the company’s annual planning process. The cuts, which began last year, were previously expected to affect around 10,000 people. The reduction is concentrated within the corporate ranks, primarily Amazon’s retail division and human resource functions like recruiting.

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“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” he said. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”

Although the prospect of layoffs has loomed over Amazon for months — the company has admitted hiring too many people during the pandemic — the rising total suggests the company’s outlook has darkened. It joins other tech giants in making major cuts. Earlier Wednesday, Salesforce Inc. announced plans to cut about 10% of its workforce and reduce its real estate holdings.

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Amazon investors have reacted positively to the latest belt-tightening efforts, betting it could boost the e-commerce company’s profits. Shares soared nearly 2% in late trading after The Wall Street Journal first reported on the plan.

Cutting 18,000 workers would be the biggest cut yet for tech companies during the current downturn, but Amazon also has a much larger workforce than its Silicon Valley peers. It had more than 1.5 million employees at the end of September, which means that the latest cuts would represent around 1% of the workforce.

As the company planned its cuts in November, a spokesperson said Amazon had about 350,000 employees worldwide.

The world’s largest online retailer spent the end of last year adjusting to a sharp slowdown in e-commerce growth as shoppers returned to their pre-pandemic habits. Amazon has delayed warehouse openings and halted hiring at its retail group. He expanded the freeze to company personnel, then started making cuts.

Jassy eliminated or scaled back experimental and unprofitable businesses, including teams working on a telehealth service, a delivery robot, and a children’s video-calling device, among other projects.

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The Seattle-based company is also trying to match excess capacity with cooling demand. One effort is to try to sell excess space on its cargo planes, according to people familiar with the matter.

Amazon, which started as an online bookstore, is seeing some of its business stabilize. But it continues to invest in its cloud computing and advertising businesses as well as video streaming.

The first wave of cuts hit Amazon’s Devices and Services group, which builds the Alexa digital assistant and the Echo smart speaker, among other products. The group’s leader told Bloomberg last month that layoffs in the unit totaled less than 2,000 people and that Amazon remained committed to the voice assistant.

Some recruiters and employees in the company’s human resources group have been offered buyouts. Jassy told employees in November that further cuts would be made in 2023 to its retail and HR teams.

In Wednesday’s memo, Jassy said the company would provide severance pay, transitional health benefits and job placement to affected workers. He also berated an employee for leaking the news, an apparent reference to the Wall Street Journal report. The company plans to begin discussing the moves with affected employees on Jan. 18, he said.

“Businesses that last for a long time go through different phases,” Jassy said. “They’re not in heavy person expansion mode every year.”

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