The cuts are expected to affect corporate employees most heavily, according to a person familiar with the plans who spoke on the condition of anonymity.
Amazon is the latest tech titan to announce significant layoffs after a decade of growth. After declaring "the day 1 acquisition of Twitter," Salesforce announced plans to layoff hundreds; Facebook reported to cut 17% in workforce, potentially killing over twice its previous headcount of 10,000; and Google parent Alphabet reportedly removed up to 5% of its workforce in 2019.
The company did not announce an exact number of layoffs, but they are expected to affect its devices, retail, and human resources teams.
If Amazon brings its big-ticket announcements to fruition, it would signal the biggest job cuts in the e-commerce giant's history.
The Washington Post is owned by Jeff Bezos. Amazon has not commented on this report.
Earlier this month, Amazon announced they'll be freezing hiring among white-collar workforce members. The freeze is expected to last at least the next few months.
After years of huge growth, the tech sector--a favorite among investors--is on shaky ground. The recent spree of layoffs is just the latest in a string of warning signs, including start-ups having trouble raising capital.
After reports of significant job cuts at some of the country's largest tech firms, some economists warn it's only a matter of time before a recession arrives.
Amazon has been expanding for most of its history, from inventing Prime memberships to pioneering cloud computing to acquiring Whole Foods. This summer, when Amazon announced it would buy health-care company One Medical for $3.9 billion, the company reported that it brought in $469.8 billion in sales last year.
Amazon has trimmed back some of its newer initiatives, and many experts have attributed this to CEO Andy Jassy. The company shut down a few of its physical bookstores earlier this year, as well as what it called a chain of four-star stores.
The announced job cuts come as a shock to Amazon, who has been hiring tens of thousands of employees in their warehouses and corporate offices over the past decade. The company had over 1.5 million employees at the end of September, a 5% increase from the year before.
Coming off a year of lackluster job growth across the board, the tech industry's highest-flying company reportedly announced that it expects 10,000 employees nationwide to receive their pink slips by year's end.
Amazon is still recovering from the financial hardships it experienced due to the H1N1 virus. The growth in sales Amazon saw during the pandemic hurt long-term earnings because the Company invested millions of dollars in employees and work hours that led to a lower quality of response during May. However, even with a projected 100% turnover rate annually, mass layoffs are unlikely.
Based on a disappointing forecast and the increasingly budget-conscious consumption habits of consumers, company stocks have fallen. Amazon’s stock has continued to decrease over the past month, following its 39% drop in the past year. Previously maintaining a $1 trillion dollar worth, Amazon’s loss has brought us down to $599 billion, which is still an impressive number.
Amazon's Chief Financial Officer has commented, “We are seeing signs all around that people's budgets are tight, inflation is still high.” He also said that the company is preparing for what could be a slower growth period similar to other companies.
Recent conversations with Amazon executives have revealed that the company is preparing for potential hiring freezes and layoffs.
In one of the meetings, executives noted that not all teams would be affected by the layoffs.
Amazon is expanding its warehouses and adding more workers. Amazon just doesn't want to cut back on this, even as we head into the busiest shopping season. The company said it will add 150,000 workers for the holiday season--and there are no signs of this number going down.
Amazon announced that they will be downsizing, which has some analysts concerned. However, Amazon still creates more jobs than it eliminates.
Although Amazon remains a formidable force, its days of easy growth are behind it. It's a warning for other companies in retail to examine how they can gain share from Amazon.
The accelerating trend of tech layoffs continues. Facebook and Instagram's parent company, Meta, recently announced that it would be cutting 11,000 jobs in the wake of a 13% reduction of its workforce last week. This was followed by an announcement from ridesharing service Lyft that it would be laying off 13% of its employees as well. More announcements on layoffs came from private fintech firm Stripe, real estate marketplace Zillow and crowdfunding platform GoFundMe since the start of this month.
Though Apple is still seen as Silicon Valley's most resilient player, the company has declared a hiring freeze. Google has also been hesitant to hire new employees, and CEO Sundar Pichai told his staff that the company needs to be acting with greater urgency, sharper focus and more hunger than it has on sunnier days.
One reason for the industry's job cuts is that tech firms are warning about the risks of a recession and cutting costs because of hiring binges during the pandemic. The Federal Reserve's persistent interest rate increases - with more to come - have squeezed tech companies that rely on cheap lines of debt to finance expensive payrolls and capital-intensive services, experts say.
The layoffs will affect the tech industry in Silicon Valley and Austin.
There will be a big shake-up in the Silicon Valley ecosystem ranging from restaurants to real estate, according to the article.
While the unemployment rates in the US are very low, the labor market has been a source of strength this year, Ives stated. However, he said that the tech industry signals a broader economic slowdown that could happen next year.
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