Amazon: The management at Amazon has announced that the company will cut another 9,000 jobs across its global business. Just months after Amazon announced it had expanded staff-cutting plans to affect more than 18,000 workers, it finally came up with the second largest cutting of staff at the online retailer this year.
Amazon does not seem to be following suit in the steps of other major companies in the United States when it comes to job cuts, but rather it looks like is in the lead.
The Great Layoff
Amazon is far from being the only company to undergo layoffs amid higher inflation and recession fears. As of the past few months, Facebook’s parent company, “META” reported 11,000 job cuts announced since November and the 10,000 announced recently, which would bring Facebook’s headcount down to around 66,000 a reduction of about 25%.
Google-parent Alphabet and Microsoft (MSFT) have all confirmed major job cuts impacting tens of thousands of tech workers. According to Bloomberg, Amazon has been laying off mostly corporate workers after a hiring spree during the pandemic left Amazon with too many people. The company recently wrapped up a round of job cuts that totaled about 18,000 workers. Those layoffs began in November and landed heaviest on Amazon’s recruiting and human resources teams, its sprawling retail group, and devices teams.
In less than four months countless companies such as Walmart, Glassdoor, Meta, Citigroup, and Twitter just to mention a few have all fired staff to cut excess expenses.
Fears of an upcoming recession have already led the retailer to announce 18,000 job cuts so far in 2023, compared with few in the same period last year. According to the Guardian, the company made it clear that in the course of finding a turnaround plan for excess spending, Amazon will reevaluate all aspects of its enterprise and reset elements of its e-commerce company. As their strategic direction changes, they hope to streamline their operations.
Reason for the layoffs at Amazon
Amazon’s chief executive, Andy Jassy, said in a letter to workers that the company had added a substantial amount of staff in the past few years, but the uncertain economy has forced it to choose cost and headcount cuts. Amazon employs more than 1.5 million people worldwide.
According to Andy, Amazon has been systematically cutting back on expenses across the business, announcing earlier this month that it was pausing the construction of part of its second headquarters in Alexandria, Virginia. Amazon has also been slowing down the global expansion of its network of distribution centers, warehouses, and other facilities since at least 2022, in some cases scrapping planned projects entirely.
Affected Departments at Amazon
According to CNN, Chief Executive Officer Andy Jassy announced the cuts internally Monday, saying they would occur in the coming weeks and primarily affect;
- Amazon Web Services
- Human resources
- Advertising
- Twitch livestreaming service groups.
Blame the Economy and the Covid pandemic
Amazon decided to lay off more employees as it looks to streamline costs. It took into account the economy, as well as the “uncertainty that exists soon,” Jassy said. The company just wrapped up the second phase of its annual budgeting process, referred to internally as “OP2.”
Amazon is undergoing the largest layoffs in company history after it went on a hiring spree during the Covid pandemic. The company’s global workforce swelled to more than 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019.
“Like many companies, our business has been impacted by the current macroeconomic environment, and user and revenue growth has not kept pace with our expectations,” Twitch CEO Dan Clancy wrote. “To run our business sustainably, we’ve made the very difficult decision to shrink the size of our workforce.”
