Amazon is severely hit by the wave of misfortune currently wrecking the revenue of tech companies, forcing them to trim their workforce. Early this month, the company lost its place in the league of trillion dollar companies. Now, it is following the steps of other companies like Meta, Facebook’s parent company, and Twitter, in laying off large number of employees.
The Times reports that Amazon is planning to lay off approximately 10,000 employees in corporate and technology roles beginning this week.
The cutting of workforce comes close to Amazon’s busiest period of the year, underlining the weight of the company’s revenue downturn.
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Shares of Amazon were down about 2.5% Monday. CNBC noted more in the report below.
The cuts would be the largest in the company’s history, and would primarily impact Amazon’s devices organization, retail division and human resources, according to the report. The reported layoffs would represent less than 1% of Amazon’s global workforce and 3% of its corporate employees.
The report follows headcount reductions at other tech firms. Meta announced last week that it’s laying off more than 13% of its staff, or more than 11,000 employees, and Twitter laid off approximately half of its workforce in the days following Elon Musk’s $44 billion acquisition of the company.
Amazon reported 798,000 employees at the end of 2019 but had 1.6 million full and part-time employees as of Dec. 31 2021, a 102% increase. The New York Times said the total number of layoffs “remains fluid” and could change.
The holiday shopping season is critical for Amazon, and usually, one where the company has increased its headcount to meet demand. But Andy Jassy, who took over as CEO in July 2021, has been in cost-cutting mode to preserve cash as the company confronts slowing sales and a gloomy global economy.
The company has already announced plans to freeze hiring for corporate roles in its retail business. In recent months, Amazon shut down its telehealth service, discontinued a quirky, video-calling projector for kids, closed all but one of its U.S. call centers, axed its roving delivery robot, shuttered underperforming brick-and-mortar chains, and is closing, canceling or delaying some new warehouse locations.
Amazon reported disappointing third-quarter earnings in October that spooked investors and caused shares to sink more than 13%. It marked the first time Amazon’s market cap fell below $1 trillion since April 2020, and the report was the second time this year that Amazon’s results have been enough to spark a double-digit percentage selloff. The selloff continued for days after the report and erased almost all of the stock’s pandemic surge.
Amazon stock is down about 41% for the year, more than the 14% drop in the S&P 500, and is on pace for its worst year since 2008.
Amazon plans to start letting go of 10,000 corporate and tech employees — or about 3% of white-collar staff — as soon as this week, according to The New York Times, which cited anonymous sources. The cuts, also reported by Reuters and The Wall Street Journal, will be the biggest in the history of the e-commerce giant, and would target units where growth is slowing amid a drop-off in pandemic online sales: retail, human resources and the devices unit that houses virtual assistant Alexa. The retrenchment by the e-commerce giant during the peak holiday shopping season underscores the economic uncertainty facing businesses, especially in technology. The company reduced head count by 80,000 from April through September, mostly through attrition, and has frozen hiring at both the corporate and hourly level. (LinkedIn News)