Technology giant Amazon plans to lay off 10,000 people in the coming days, adding to the bloodbath being witnessed in the technology world after Twitter and Facebook parent Meta significantly trimmed their workforces.
The New York Times said in a report Monday that Amazon plans
to lay off approximately 10,000 people in “corporate and technology jobs
starting as soon as this week.” While the NYT said in its report that the total
number of layoffs remains “fluid”, the 10,000 people who could be let go
represent roughly three percent of Amazon's corporate employees and less than
one percent of its global workforce of more than 1.5 million composed primarily
of hourly workers.
“The cuts will focus on Amazon's devices organisation,
including the voice-assistant Alexa, as well as at its retail division and in
human resources,” the report said.
Amazon's layoffs come just weeks after Twitter's new owner
billionaire Elon Musk reduced the social media's workforce by half and Meta announced
it will lay off 13 percent of its workforce or 11,000 employees.
The report of impending layoffs at Amazon also comes on the
day its founder Jeff Bezos told CNN he plans to give away the majority of his
$124 billion net worth to charity within his lifetime.
Troubled times had been brewing at Amazon as the NYT
reported that from April through September, the tech giant reduced its
headcount by almost 80,000 people, primarily shrinking its hourly staff through
high attrition.
“Amazon froze hiring in several smaller teams in September.
In October, it stopped filling more than 10,000 open roles in its core retail
business. Two weeks ago, it froze corporate hiring across the company,
including its cloud computing division, for the next few months. That news came
so suddenly that recruiters did not receive talking points for job candidates
until almost a week later, according to a copy of the talking points seen by
The New York Times,” it said.
The NYT report said that Amazon's “planned retrenchment
during the critical holiday shopping season — when the company typically has
valued stability — shows how quickly the souring global economy has put
pressure on it to trim businesses that have been overstaffed or underdelivering
for years.
After experiencing its “most profitable era on record”
during the COVID-19 pandemic years, which saw exponential growth in online
consumer spending, “Amazon's growth slowed to the lowest rate in two decades,
as the bullwhip of the pandemic snapped.”
The report noted that during the pandemic years, as
consumers flocked to online shopping and companies to Amazon's cloud computing
services, the tech giant doubled its workforce in two years, and channelled its
winnings into “expansion and experimentation to find the next big things.”
However, as the world recovered from the pandemic and consumers scaled back on
online shopping, Amazon faced “high costs from decisions to overinvest and
rapidly expand, while changes in shopping habits and high inflation dented
sales.”
Amazon's retail business covering its physical and online
retail business and its logistics operations has been “under strain" after
the surge of demand and “breakneck expansion” during the pandemic, NYT said.
Amazon has said it has pulled back expansion plans and has told investors it
sees uncertainty with consumers.
“We're realistic that there are various factors weighing on
people's wallets,” Brian Olsavsky, the finance chief, told investors last
month, according to the NYT report. He said the company was unsure where
spending was heading, but “we're ready for a variety of outcomes.”
The NYT report added that in recent months, Amazon has shut
down or pared back several of its initiatives, including Amazon Care, which
provided primary and urgent health care after it failed to find enough
customers; Scout, the cooler-size home delivery robot, that employed 400 people
and Fabric.com, a subsidiary that sold sewing supplies for three decades.
For Amazon, Devices and Alexa have long been seen internally
as at risk for cuts. The NYT report said Alexa and related devices “rocketed to
a top company priority as Amazon raced to create the leading voice assistant,
which leaders thought could succeed mobile phones as the next essential
consumer interface.” From 2017 to 2018, Amazon doubled its staff on Alexa and
Echo devices to 10,000 engineers. “At one point, any engineer getting a job
offer for other Amazon roles was supposed to also get an offer from Alexa,” it
said.