Amazon starts the year with the announcement that it will lay off 18,000 employees, 8,000 more than it said in November. The company alleges an “uncertain economy” to justify the dismissal of its workers. While most of these dismissals will take place in the United States, some will be in Europe, citing an “uncertain economy” and the fact that the online retail giant had hired quickly during the pandemic.
“Between the reductions we made in November and the ones we share today, we plan to cut just over 18,000 positions”, said Andy Jassy, chief executive of the US group, in a statement to employees. The downsizing plan is the largest among recent job cut announcements affecting the US technology sector. It is also the most severe cut in the history of the Seattle-based company. Jassy said company management was “deeply aware that these job cuts are hard on people, and we don’t make these decisions lightly”.
“We are working to support those affected and offer them packages that include severance pay, temporary health insurance, and external help to find work”, Jassy added. He also mentioned that the affected workers will be informed as of January 18. The sudden announcement, Jassy noted, was being made because “one of our teammates leaked this information externally”, so the company was simply trying to get ahead of the leads.
The Wall Street Journal, citing sources close to the distribution giant, previously reported that job cuts at Amazon could affect as many as 17,000 employees. The company had already announced plans to cut some 10,000 jobs in November. “Amazon has weathered uncertain and difficult economies in the past and we will continue to do so”, Jassy said.
At the end of September, the group had 1.54 million employees worldwide, not including seasonal workers who work in periods of greater activity, especially during the year-end holidays. During the pandemic, the company made massive hires to meet demand, thus doubling its staff globally between 2020 and 2022. However, its net profit sank 9% year-on-year in Q3 2022.
Amazon is not the only company in the tech sector making major layoffs. Companies like Meta, Facebook’s parent company, have announced 11,000 job cuts, representing 13% of its workforce. Others tech companies that rely heavily on advertiser revenue have also seen drastic revenue declines, signalling the end of a highly profitable period for big tech.