Amazon has begun mass layoffs at large companies, becoming the latest tech company to lay off workers amid growing concerns about the broader economic environment.
On Tuesday, the company notified local California authorities that it will furlough about 260 employees at various facilities that employ data scientists, software engineers, and other corporate employees. These job cuts will take effect from 17 January.
Amazon does not specify how many additional layoffs may occur beyond the workforce reductions identified by California’s Worker Adjustment and Retraining Notification Act (also known as WARN). part-time workers. Amazon worldwide he employs over 1.5 million workers, mostly made up of hourly workers.
The online retail giant, like other tech and social media giants, has made sizable profits during the COVID-19 pandemic as homeless shoppers bought more online. rice field. But as the worst of the pandemic eased and consumers became less dependent on his e-commerce, revenue growth slowed.
The Seattle-based company has reported losses for the second time this year, largely due to a write-down in the value of its equity investment in electric vehicle startup Rivian Automotive. The company returned to profitability during the third quarter, but investors were pessimistic about lower-than-expected earnings and lackluster forecasts for the quarter.
To cut costs, Amazon has already canceled some projects. Examples include subsidiary fabric.com, Amazon Care, and cooler-sized delivery robot Scout. It is also shrinking its physical footprint by postponing or canceling plans to occupy several new warehouses across the country. He said he was prepared for a period of possible slowdown in demand and would be cautious about hiring in the near future.
Mass layoffs are rare at Amazon, but the company repeatedly cut jobs during the dot-com crash in 2018 and 2001. On the warehouse side, e-commerce giants typically cut headcount through staff cuts.
Faced with high costs, the company announced earlier this month that it would suspend hiring of corporate employees, adding to the freeze it did in its retail sector a few weeks ago. Employees working in various departments, including voice assistant Alexa and her cloud gaming platform Amazon Luna, said they were laid off on Tuesday, according to a LinkedIn post. Some of them were based in Seattle, where the company is headquartered.
“As part of our annual operating plan review process, we are constantly reviewing each business and what we believe should be changed,” Amazon spokeswoman Kelly Nantel said in a statement. Given the current macroeconomic environment (and several years of rapid hiring), some teams are making adjustments as they have experienced this, which in some cases has meant that certain roles are no longer needed. It means that
In a note to the Devices & Services team that Amazon shared on its website, the team’s senior vice president, David Limp, said the company is integrating programs with several teams. He said those laid off in the process would be notified on Tuesday and the company would work with them to “provide support” including help finding new jobs. If you can’t find one, Limp said Amazon will offer severance pay, outsourced job placement assistance, and what he calls transition benefits.
The retail giant follows headcount cuts by other tech giants in the past few weeks. This is the opposite of earlier this year, when tech workers were in high demand. Facebook’s parent company Meta announced last week that it was laying off 11,000 of its employees, about 13% of its workforce. Twitter’s new CEO, Elon Musk, also cut the company’s workforce in half this month.
Moving forward, Wedbush Securities analyst Daniel Ives said Amazon will retain its employees and investments in profitable areas such as AWS in its cloud computing division, while it will continue to invest in areas such as Alexa and other moonshot projects. We believe that we will reduce costs in non-strategic areas.
“The clock has struck midnight in terms of big tech growth,” said Ives. “These companies have been hiring at an alarming rate and have not been sustainable. Now there are some painful steps ahead.”