As it fights to slash expenses, Amazon expects to eliminate more than 18,000 workers, the most ever in the history of the company.
The multinational internet behemoth, which employs 1.5 million people worldwide, did not specify which nations will be affected by the job losses but did indicate they would affect Europe.
The company's consumer retail business and human resources section will be where the majority of job losses occur.
Boss Andy Jassy blamed the layoffs on the "uncertain economy," claiming that the company has "hired quickly over several years."
In a message to employees, he stated, "We don't take these decisions lightly or underestimate how they might affect the lives of those who are impacted."
He claimed that one of the company's workers had leaked the layoffs to the outside world, prompting the early announcement.
"Companies that last a long time go through different phases. They're not in heavy people expansion mode every year," he continued.
One employee of an Amazon Fresh store responded to the development by telling the BBC: "We're not allowed to speak about it, even to each other."
Naturally, I'd prefer to maintain my job, the employee said. However, they were aware that there are now a lot of openings in the UK, and if this position were to be eliminated, they would only apply for another.
Amazon on a diet
After experiencing a commercial boom during the epidemic, when consumers at home spent a lot online, Amazon has seen sales decline.
Tech companies are being badly impacted by a strong confluence of falling advertising income as a result of corporations cutting costs and consumers cutting down on spending as the cost of living issue strikes.
While the job losses at Amazon were "a big number," according to retail analyst Neil Saunders, managing director of GlobalData Retail, the business has hired around 743,000 more workers overall since 2019, "some of which was based on irrational exuberance during the pandemic," he said.
"Amazon is on a diet," declared Mr. Saunders, adding that additional cuts would probably be made in the months and years to come.
Both Salesforce, a provider of cloud-based commercial software, and Meta, the owner of Facebook, Instagram, and WhatsApp, have lately announced significant layoffs.
Amazon has already made the announcement that it will scale down on initiatives like the Echo, also known as Alexa, and delivery robots, which were merely nice-to-haves but didn't generate any revenue.
According to anecdotal evidence, companies in Silicon Valley often acquire and keep exceptional employees at appealing pay even when they are not urgently needed in order to prevent them from joining competitors. The major IT industry can no longer afford to support this culture.
The impacted Amazon employees will be informed on January 18th.
More pain ahead
The action follows the IT juggernaut's announcement last year that it will decrease its staff without specifying the number of positions that would be eliminated.
As a result of its warning that it had overhired during the epidemic, the corporation had already halted hiring new employees and scaled back some of its warehouse expansions.
According to LinkedIn posts made by employees who claimed to have experienced job losses, Amazon began terminating employees as early as November.
The BBC was able to view posts made by workers at Lab126, the company that created the Kindle e-reader, the Luna cloud gaming platform, and Amazon's Alexa virtual assistant business.
Additionally, it has made efforts to close off some areas of its operations by shelving plans for things like a personal delivery robot.
According to Ray Wang of the Silicon Valley-based consultancy Constellation Research, "Prior to the pandemic, tech companies would often remove only the bottom 1% to 3% of their workforce,"
Wedbush Securities' Dan Ives stated that he thinks Amazon will have "more pain ahead" as consumers tighten their purse strings.
Tens of thousands of jobs are being lost throughout the worldwide IT sector as a result of sluggish sales and mounting worries about a recession.
Meta said in November that it will reduce its employment by 13%.
There will be 11,000 job losses from an overall workforce of 87,000 due to the social media company's first major layoffs.
The adjustments, according to Mark Zuckerberg, chief executive of Meta, were "the most difficult changes we've made in Meta's history".
The announcement came after Twitter made significant personnel reductions, cutting almost half of its workforce when billionaire Elon Musk took over the company in October.
Sourced from BBC News - Business
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