Amazon.com Inc on Wednesday said it has laid off some employees in its devices group as a person familiar with the company said it still targeted around 10,000 job cuts, including in its retail division and human resources.
The announcement, Amazon's first since media outlets
including Reuters reported its layoff plans on Monday, heralded a dramatic
shift for a company known for its job creation and added shape to the latest
dismissals befalling the technology sector.
Amazon executive Dave Limp in a blog post said the company
had decided to consolidate teams in its devices unit, which popularized
speakers that consumers command through speech. It notified the employees it
cut on Tuesday.
"We continue to face an unusual and uncertain
macroeconomic environment," he said. "In light of this, we've been
working over the last few months to further prioritize what matters most to our
customers and the business."
Plans, still in flux, to eliminate around 10,000 roles
through reductions in more units would amount to about a 3% cut in Amazon's
roughly 300,000-person corporate workforce. The company has offered voluntary
buyouts to some human-resources staff, the source familiar with Amazon's
job-cut plans said.
For years, the online retailer aimed to make Alexa, the
voice assistant that powers gadgets it sells, ubiquitous and present to place
any shopping order, even though it was unclear how widely users have embraced
it for more complex tasks than checking the news or weather.
A project inspired by a talking computer in science fiction
show Star Trek, Alexa had garnered headcount that grew to 10,000 people by
2019.
At the time, Amazon touted sales of more than 100 million
Alexa devices, a figure it has not since refreshed publicly. Founder Jeff Bezos
later said the company often sold Alexa devices at a discount and sometimes
below cost.
While Amazon has toiled to encode intelligent answers to any
question Alexa might expect from users, Alphabet Inc's Google and Microsoft
Corp-backed OpenAI have had breakthroughs in chatbots that could respond like a
human without any hand holding.
Dozens of individuals posted on the professional networking
site LinkedIn to say Amazon had laid them off, among them people who claimed to
work on privacy for Alexa and software for the company's cloud gaming service
Luna.
Following the layoff news, shares pared losses and closed
down about 2%.
The news follows Facebook's parent Meta Platforms Inc
announcement last week to eliminate 11,000 jobs, on top of layoffs at Twitter
Inc, Microsoft, Snap Inc and others.
For Amazon, the cuts sharply contrast with efforts months
ago to double its base pay ceiling to compete more aggressively for talent.
In September last year it had marketed 55,000 corporate
roles globally during a career fair, an increase dwarfed only by hiring in
Amazon's fulfillment centers. In short order, the online bookseller that Bezos
envisioned on a road trip not 30 years before had become America's
second-largest private employer, with more than 1.5 million workers including
warehouse staff.
The turn has been abrupt. The retailer is now responding to
sales that could rise as little as 2% this holiday season, compared with a 38%
increase two years ago. Amazon's chief financial officer told reporters last
month that consumers had tighter budgets in the face of inflation and higher
fuel costs.
Its cloud-computing division, a profit engine for the
company, likewise has increased revenue more slowly quarter after quarter in
the past year, when adjusted for foreign exchange.
Andy Jassy, who ascended to the role of CEO in 2021, has
focused on cutting costs and stemming Amazon's 43% share-price drop this year
to date.
Under his tenure Amazon announced the end of its virtual
healthcare service for employers and pruning of its much-hyped autonomous
sidewalk delivery program. It froze incremental corporate hiring as well.