Amazon to layoff 10,000 employees starting this week, reports New York Times

Amazon to layoff 10,000 employees starting this week, reports New York Times

Updated: 2 months, 23 days, 7 hours, 48 minutes, 34 seconds ago

E-commerce giant Amazon is planning to lay off 10,000 employees in its corporate and technology departments beginning this week in what would the largest job cut in the company’s history, reported The New York Times, citing those familiar with the developments.

The layoffs will focus on Amazon’s devices organisation, which deals with products like voice assistant Alexa, as well as its retail division and human resources. Amazon is likely to roll out the layoffs team by team rather than all at once

Sacking 10,000 employees would roughly represent 3% of the company’s corporate employees and less than 1% of its global workforce of nearly 16 lakh, according The New York Times.

Several other technology companies have also announced layoffs over the last few weeks.

Last week, Twitter had said it has laid off 50% of its workers across the world after Tesla founder Elon Musk took over the microblogging platform on October 27. In the same week, Meta Chief Executive Officer Mark Zuckerberg had announced firing over 11,000 employees, reducing the company’s staff strength by 13%.

Lyft, Stripe, Snap and other tech firms have also laid off workers in recent months.

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Why Mark Zuckerberg can fire 11,000 workers but Meta’s shareholders cannot sack him

Amazon had made record profits in the coronavirus pandemic as consumers opted for online shopping and companies chose its cloud computing services. In two years, Amazon doubled its work force and used the profit to expand and experiment, according to The New York Times.

However, in July, Amazon reported its slowest quarterly growth rate during the three month period of April-June with only 7.2% increase in revenue as the highs from the pandemic began to recede. The expansion and new investments began incurring high costs to the company as a change in consumers’ online shopping habits ate into sales revenue.

The losses have prompted layoffs, according to the newspaper, just as it had done in the past. In 2001, Amazon had cut 1,500 jobs, its 15% workforce at the time. Again in 2018, Amazon had laid off a few hundred employees after a rapid expansion period.

“We’re realistic that there’s various factors weighing on people’s wallets,” Amazon Chief Financial Officer Brian Olsavsky had told investors last month, according to The New York Times.

In recent months, the e-commerce company has shut down or cut off on several of its products and services, including health care scheme Amazon Care that failed to attract customers and Fabric.com, an arm of the company that had been selling sewing supplies for 30 years.

Amazon is also shutting down its home delivery robot Scout division that employed 400 persons, reported Bloomberg.

In September, the company had frozen hiring in smaller teams. A month later, it paused filling over 10,000 jobs in its core retail business, according to The New York Times. Two weeks ago, it froze corporate hiring across the company for the next few months.

Between April and September, Amazon’s layoffs amounted to about 80,000 employees, mostly its hourly staff, losing their jobs.

John Blackledge, an analyst at Cowen & Company, told The New York Times that his calculations showed Amazon’s core e-commerce business has been losing billions this year.

“They need to review everything,” he said. “This is just not sustainable.”

Meanwhile at the time of job cuts, Amazon founder Jeff Bezos has told CNN in a interview that he plans to give away the majority of his $124 billion (about Rs 10.08 lakh crore) net worth fighting climate change and supporting those who can are trying to unify humanity in the times of deep social and political divisions.

However, Bezos, one of the richest persons, has not clarified how much he plans to donate.