Amazon to cut more than 18,000 jobs
Blames poor economy and over-hiring during the pandemic
Amazon is to eliminate more than 18,000 positions from its workforce, citing the uncertain economic situation and the over-recruitment during the pandemic.
In a memo to staff CEO Andy Jassy said the company's brick-and-mortar stores, including Amazon Fresh and Amazon Go, and its PXT groups, which handle human resources and other functions, would be most affected by the layoffs.
Jassy added that company's leadership was well aware of how tough it is for employees to lose their jobs, although that is unlikely to comfort staff facing redundancies.
With more than 1.5 million employees, including warehouse personnel, Amazon is the second-largest private employer in the USA, after Walmart. Eighteen thousand jobs represents about 1.2% of its total workforce, and is lower than the 20,000 positions said to be on the chopping block last month.
In November, Jassy told staff layoffs would be coming as a result of the current economic climate and the company's aggressive recruitment over the past several years. The latest announcement includes earlier job cuts that had not been finalised.
Fellow tech giants Meta and Salesforce also cited over-hiring in 2020/21 as reasons for cutting roles in the last month.
"We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support," said Jassy.
"Companies that last a long time go through different phases. They're not in heavy people expansion mode every year."
The Amazon CEO did not specify the regions or countries where employees will be affected, but said they would include Europe. If the cuts are equally applied across the world, as many as 900 UK jobs - where the company employs about 75,000 people - could be under threat.
The company will begin communicating with the affected workers beginning 18th January.
Jassy said the reason for the sudden announcement was because the information was leaked externally by "one of our teammates".
The massive layoff represents a quick turn for a company that recently doubled its base pay ceiling in an effort to attract talent.
Due to the challenging state of the global economy, Amazon has started to scale down certain business operations, including projects such as Echo (also known as Alexa) and delivery robots - both of which were losing money for the company.
Tens of thousands of jobs have been lost across the global tech industry in the past several months as a result of sluggish sales and growing concerns about a recession.
According to tracking website Layoffs.fyi, tech companies laid off more than 150,000 people in 2022, and that figure is expected to rise.
Facebook-owner Meta said in November it would reduce its workforce by 13%. It made the announcement just after Twitter cut almost half its workforce, after its acquisition by multi-billionaire Elon Musk October.
Salesforce, Arm, Twilio and Oracle are among the other global tech firms to have announced job cuts and/or hiring freezes in the past six months.