As the company strives to minimize expenses, Amazon has announced that it intends to eliminate more than 18,000 positions, which would be the highest amount in the company’s history.
The internet behemoth, which has 1.5 million people working for it throughout the world, did not specify which nations would be affected by the job losses, but it did state that Europe would be one of the regions affected.
Most of the job cuts will come from the company’s consumer retail business and its human resources department.
In a memo to his staff, CEO Andy Jassy said that workers who will be affected would be told about the situation starting on January 18.
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According to the BBC, the layoffs will affect about 6% of the company’s total corporate staff of about 300,000.
Andy Jassy blamed the layoffs on the “uncertain economy,” noting that the company has hired rapidly over the course of several years.
He said in a memo to staff, “We don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted.”
He stated that the announcement had been made because one of the company’s workers had leaked the news of the cuts to the outside world.
“Companies that last a long time go through different phases.” not in heavy people -person on mode every year,” he added.
Read also: Amazon Ends Their Support For Third-party HIPAA-compliant Alexa skills
The Cause of Amazon’s Action
After seeing a sales boom during the pandemic, when customers at home spent a lot of money online, Amazon has seen those sales levels down in recent months.
Tech companies are taking a significant hit as a result of a potent combination of factors, including a decline in advertising revenues as a result of businesses wanting to save cash and a decrease in consumers’ purchasing as a result of the cost of living problem.
Amazon has already made the announcement that it will be scaling back on projects such as the Echo (also known as Alexa) and delivery robots. These were projects that were nice-to-haves but were not actually profitable for Amazon.
According to anecdotal evidence, businesses in Silicon Valley have a propensity to hire and keep brilliant employees at appealing pay, even when such employees are not immediately required. The primary motivation for this practice is to prevent talented employees from working for competitors. This culture is a luxury that huge IT companies can no longer afford to retain at their current levels.
The Amazon corporation had already put a stop to hiring new employees and had halted some of its warehouse expansions after receiving a warning that it had over-hired during the pandemic.
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Tracing When It Began
The corporation has been preparing for months for the possibility of slower growth as a result of rising inflation, which has prompted businesses and consumers to reduce their spending. A recent assessment of consumer prices shows that they are almost 7% higher than they were one year earlier. This holiday season, U.S. merchants overall reported a lesser gain in online sales.
In November, Amazon started laying off employees in the devices sector of the company. At the time, a source told Reuters that the company was aiming to make approximately 10,000 cutbacks.
According to the tracking site Layoffs.fyi, the number of people who lost their jobs in the technology business in 2022 increased to more than 150,000 and is still rising. On Wednesday, Salesforce Inc. (CRM.N) said that the company intended to lay off around 10% of its workforce, which stood at almost 8,000 as of the 31st of October.
After a report appeared in the Wall Street Journal stating that the decrease would affect more than 17,000 employees, Jassy sent out his note. He stated that Amazon made the decision to make the news public before alerting the impacted employees due to a leak.
Amazon is required to file various legal notices regarding the layoff of a large number of employees, and the company intends to pay severance.