Amazon.com Inc is expected to lay off over 10,000 individuals in corporate and technical jobs beginning this week, according to sources cited by the New York Times on Monday.
According to media reports, “the layoffs will center on the e-commerce giant’s devices unit, which contains voice-assistant Alexa, as well as its retail division and human resources,” and “the total number of layoffs remains variable.”
Amazon has joined the ranks of firms in the United States that are laying off large numbers of employees in preparation for a possible economic slump. As of December 31, 2021, Amazon had around 1,608,000 full-time and part-time employees.
Last week, Facebook-parent Meta Platforms announced that it would slash almost 11,000 jobs, or 13% of its staff, to decrease costs.
Amazon had recently fought to keep its staff. Earlier this year, the e-commerce behemoth more than doubled the cash salary threshold for its tech employees, citing “an extremely competitive labor market.”
According to a New York Times article, over 3% of Amazon’s corporate staff, or approximately 10,000 people, will be laid off.
However, during this year, Amazon’s growth fell to its slowest rate in two decades, as the pandemic’s bullwhip snapped. Rising costs were incurred as a result of the company’s choice to overinvest and aggressively grow, while changes in buying patterns and high inflation hampered sales.
Amazon has been one of the most stable employers in technology. The layoffs, which Amazon has not yet officially announced, will be the largest in the company’s history.
Amazon’s workforce reduction indicates that consumer sentiment is low, particularly in the weeks leading up to the holiday season, which is typically the best time of year for e-commerce.
Amazon is anticipated to cut off personnel in the devices vertical as the global surge in demand for Alexa devices begins to subside.
The main explanation is a drop in demand as the world recovers from the Covid-19 pandemic. Pandemic-induced lockdowns drove people indoors, forcing them to buy more online, spend more time on social media sites, watch more streaming content, and play games with others.
This began to manifest in the number of tech companies that had been hiring to meet the rising demand over the previous few years.
As people return to their offices and rediscover the outdoors, engagement and profitability across platforms are decreasing. As a result, these platforms require fewer employees to manage.
Companies that assumed that changing user behavior would sustain the epidemic spike are discovering that this is not the case.
To make matters worse, there are signs that a worldwide recession is on the way, and demand for non-essential goods is already down in several countries. A purchase that can be postponed is often postponed.