Amazon, Inc. began to cut jobs this week, the first time in more than 20 years that the internet shopping giant has laid off any of its employees. The cuts are concentrated in two business units at opposite ends of the company’s diversified business model: the Alexa unit and the cloud gaming division that came as part of Amazon’s acquisition of game-streaming service Twitch Interactive last year.
As CEO Andy Jassy intensifies efforts to contain expenses, Amazon started laying off people on Tuesday in its corporate and tech divisions.
According to LinkedIn posts from Amazon employees who claim to have been impacted, the corporation informed staff in a number of departments, including Alexa and the Luna cloud gaming operation, that they were being let go.
According to a Monday article in The New York Times, Amazon plans to remove around 10,000 positions, largely in the retail, device, and human resources industries. According to the Times, the figure is still erratic since several teams are carrying out the cutbacks.
According to a source familiar with the situation who wanted to remain anonymous out of respect for their employer’s privacy, by lunchtime on Tuesday, Amazon had not sent any company-wide communications regarding the anticipated layoffs, which angered staff members.
Amazon representatives declined to comment.
According to those with knowledge of the reductions, Amazon also started terminating several contractual workers who served in recruitment capacities for its advertising, internal operations, and Fire TV departments recently.
Amazon informed one employee earlier this month that it wouldn’t be renewing her contract, the employee said, asking to remain anonymous. She had been in discussions to pursue a full-time position in Amazon’s consumer division last month, but she was informed that her interview had been abruptly cancelled due to ongoing restructuring.
In recent months, Jassy has aggressively reduced spending across the board as it battles a faltering economy and sluggish development in its retail division. The business already announced that it will stop hiring for its corporate personnel, and it has also chosen to terminate, postpone, or cancel new warehouse sites in addition to stopping several experimental initiatives.
It had so far avoided mass layoffs by giving workers impacted by project closures the chance to transfer to other departments within the business.
The layoffs reflect a sharp reversal for Amazon, which less than a year ago struggled to keep its warehouses filled in a competitive labour market and was still engaged in a hiring frenzy motivated by the epidemic. Between the end of 2019 and the end of 2021, it almost doubled the number of employees it had worldwide, going from 798,000 to 1.6 million.
As customers have since started visiting physical stores again, it has slowed down workforce growth, and its retail operation is no longer expanding as quickly as it had in recent years. Last month, Brian Olsavsky, CFO of Amazon, stated that the business is beginning to notice indications that consumers are feeling the pinch of inflation.
Following the release of the company’s third-quarter financial results, which included weaker-than-expected forecasts for the current quarter, Olsavsky remarked on a teleconference with reporters, “We are preparing for what may be a slower growth phase.”
As it did the year before, the corporation still intends to hire 150,000 new workers for the busy holiday shopping season.
After years of unchecked development, the IT industry is being severely impacted by job layoffs. Last week, Facebook parent company Meta lost 13% of its workforce; more layoffs have been reported by Twitter, Shopify, Salesforce, and Stripe.
The anticipated layoffs would be the largest in the 28-year history of the organisation. After the dot-com boom crashed in 2001, Amazon eliminated 1,300 positions, or 15% of its staff.