Amazon’s layoffs are going to be bigger than we had anticipated.
Last year, reports surfaced that the second-largest private employer in the US was looking to fire as many as 10,000 employees across corporate and tech sectors. A recent memo by CEO Andy Jassy changes that, and the staff note revealed that the layoffs will go on to affect around 18,000 employees instead. The layoffs amount to around 6% of Amazon’s nearly 300,000-strong corporate workforce.
Jassy’s note read that the company will “typically wait to communicate about these outcomes until we can speak with the people who are directly impacted.” It reveals the development because “one of our teammates leaked this information externally.” This development also confirms a prior statement by Jassy – he had warned in November 2022 that there would be “more role reductions” at the company this year as “leaders continue to make adjustments,” but it is hashing out the details on the same for the first time.
If Amazon goes on to shed the near-18,000 roles in its company, then it will go down in history as one of the largest single-shot layoffs ever. As of September 2022, the Seattle-headquartered behemoth had around 1.5 million employees. The ongoing reduction in workforce will eliminate multiple rules across Amazon Stores and People, Experience, and Technology divisions. The latter includes teams involved in Human Resources.
The impacted employees will be contacted from January 18. Layoffs have already begun across its Devices and Books division – which contains products like Alexa and Fire TV – as the company looks to tackle a year that is likely to witness further economic uncertainty, recession fears, and a funding winter. It has also been consolidating some of its teams and programs in its hardware and services division as part of its cost-cutting measures.
For now, Amazon said that it is working to support the numerous employees who have been impacted by the development – it is providing packages that include a separation payment, support for external job placement, as well as transitional health insurance benefits.
Amazon’s decision to fire hundreds – no, thousands – in what is the largest round of reduction by a tech giant has become the rule, and not the exception. A report by Forbes last month highlighted that over 120,000 employees from large US tech companies, banks, and manufacturers found themselves out of a job last year, while job cuts affected around 18,000 employees in Indian startups. High-profile companies like Meta and Intel announced that they would significantly reduce their workforce, while Salesforce recently revealed that it was looking to cut 10% of its workforce “in the coming weeks” – something that will affect around 7900 employees.
Jassy confessed that annual planning “has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years.” Much of this over-hiring came during the pandemic when the company saw an unprecedented shift to online shopping as they were confined to their homes for months – something that saw Amazon double its logistics network. After the pandemic-induced boom began to ebb last year as customers resumed offline shopping, Amazon initiated cost-cutting measures – which includes a freeze on hiring, shutting down businesses, and finally conducting layoffs.