Amazon.com Inc. lays off over 18,000 employees. That’s significantly higher than previously planned and the latest sign of a deepening technology recession.
Chief Executive Andy Jassy announced the move in a memo to staff on Wednesday, saying it follows the company’s annual planning process. was expected to give The cuts are concentrated in the company’s corporate ranks, primarily in Amazon’s retail division and human resources functions such as hiring.
“Amazon has weathered uncertain and difficult economies in the past and will continue to do so,” he said. “These changes will help us pursue long-term opportunities with a stronger cost structure.”
Though layoff prospects have loomed over Amazon for months — the company has admitted hiring too many people during the pandemic — the increase in totals suggests the company’s outlook has dimmed. It joins other tech giants by making significant cuts. Earlier Wednesday, Salesforce Inc. announced plans to cut about 10% of its workforce and reduce its real estate holdings.
Amazon investors reacted positively to recent belt-tightening efforts, betting it might boost the e-commerce company’s profits. rose nearly 2% in late trading.
Cutting 18,000 employees would be the biggest cut ever for a tech company in the current economic slowdown, but Amazon has far more employees than its Silicon Valley peers. . With more than 1.5 million employees as of the end of September, the latest cuts would mean about 1% of the workforce.
At the time the company was planning to cut jobs in November, a spokesperson said Amazon had about 350,000 corporate employees around the world.
The world’s largest online retailer spent the end of last year reacting to a sharp slowdown in e-commerce growth as shoppers reverted to their pre-pandemic habits. Amazon has delayed opening warehouses and halted hiring at retail groups. The freeze was extended to include the company’s corporate staff, after which cutbacks began.
Jassy eliminated or scaled back experimental and unprofitable businesses, including teams working on projects such as telemedicine services, delivery robots, and video calling devices for children.
The Seattle-based company is also looking to match excess capacity to cooling demand. One of those efforts includes an attempt to sell excess space on freighters, according to people familiar with the matter.
Amazon, which began as an online bookstore, has seen parts of its business flatten out. But it continues to invest in cloud computing, advertising business and video streaming.
The first wave of cuts hit Amazon’s Devices and Services group the most. The group makes products like the Alexa digital assistant and the Echo smart speaker. The group’s chief told Bloomberg last month that layoffs in the division totaled less than 2,000 people and that Amazon remains committed to voice assistants.
Some recruiters and employees in the company’s human resources group have been offered acquisitions. Jassy told employees in November that there will be further layoffs in retail and human resources in 2023.
In a note Wednesday, Jassy said the company will provide severance pay, temporary health benefits and job placement to affected workers. He also reprimanded an employee for leaking news that was an apparent reference to a Wall Street Journal report.The company plans to discuss the move with affected employees on Jan. 18. he said.
“Long-lived companies go through different stages,” Jassy says. “They’re not in heavy people expansion mode every year.
