Amazon intends to cut more than 18,000 jobs, the most in the company’s history, in a bid to cut costs.
The online retailer, which employs 1.5 million people worldwide, did not specify which countries would be affected, but noted that Europe would not be left out.
The majority of the job losses will be in its consumer retail and human resources divisions.
Andy Jassy, the company’s CEO, blamed the layoffs on the “uncertain economy,” saying the company had “hired rapidly over several years.”
“We don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted,” he said in a memo to staff.
He said the announcement had been brought forward due to one of the firm’s employees leaking the cuts externally.
“Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” he added.
Amazon’s sales have slowed after a surge during the pandemic, when customers bored at home spent a lot of time online.
A potent combination of a downturn in advertising revenues due to businesses seeking to save cash and consumers spending less as the cost of living crisis bites is hitting tech firms hard.
Other major tech companies, such as Meta, which owns Facebook, Instagram, and WhatsApp, and cloud-based business software firm Salesforce, have recently announced significant layoffs.
Amazon has already announced that it’s cutting back on projects like the Echo (better known as Alexa) and delivery robots – which were nice-to-haves but not actually making money.
Anecdotally, there’s a tendency in Silicon Valley for firms to hire and retain talented workers on attractive salaries, even if they’re not immediately needed, primarily in order to stop them working for rivals. This culture is a luxury that big tech can no longer afford to maintain.
Amazon employees affected by the cuts are expected to be informed by January 18.
The move comes after the technology giant said last year that it would reduce its headcount without saying how many jobs would be cut.
A potent combination of a downturn in advertising revenues due to businesses seeking to save cash, and consumers spending less as the cost of living crisis bites, is hitting tech firms hard.
‘More pain ahead’
The company had already stopped hiring new staff and stopped some of its warehouse expansions, warning it had over-hired during the pandemic.
It has also taken steps to shut some parts of its business, cancelling projects such as a personal delivery robot.
“Prior to the pandemic, tech companies would often remove only the bottom 1% to 3% of their workforce,” Ray Wang from the Silicon Valley-based consultancy Constellation Research told the BBC.
Dan Ives from investment firm Wedbush Securities said he believes Amazon will face “more pain ahead” as customers tighten their belts.
Industry-wide cuts
Tens of thousands of jobs are being shed across the global technology industry, amid slowing sales and growing concerns about an economic downturn.
In November,
Facebook owner Meta announced that it would cut 13% of its workforce.
The first mass lay-offs in the social media firm’s history will result in 11,000 employees, from a worldwide headcount of 87,000, losing their jobs.
Meta chief executive Mark Zuckerberg said the cuts were “the most difficult changes we’ve made in Meta’s history”.
The news followed major layoffs at Twitter, which cut about half its staff after multi-billionaire Elon Musk bought the firm in October.
Amazon started laying off staff as early as November, according to LinkedIn posts by workers who said they had been impacted by job cuts.
Posts seen by the BBC included those from employees in Amazon’s Alexa virtual assistant business, Luna cloud gaming platform division, and Lab – the operation behind the Kindle e-reader.
Source: BBC.com