SEATTLE, United States —
Amazon plans to lay off approximately 10,000
people in corporate and technology jobs starting as soon as this week, people
with knowledge of the matter said, in what would be the largest job cuts in the
company’s history.
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The cuts will
focus on Amazon’s devices organization, including the voice assistant Alexa, as
well as at its retail division and in human resources, said the individuals,
who spoke on condition of anonymity because they were not authorized to speak
publicly.
The number of
layoffs remains fluid and is likely to roll out team by team rather than all at
once as each business finishes plans, one person said. But if it stays around
10,000, it would represent roughly 3 percent of Amazon’s corporate employees
and less than 1 percent of its global workforce of more than 1.5 million, which
is primarily composed of hourly workers.
Amazon would
also become the latest technology company to lay off workers, which only
recently it had been fighting to retain. The e-commerce giant more than doubled
the cap on cash compensation for its tech workers this year, citing “a
particularly competitive labor market”.
Changing
business models and the precarious economy have set off layoffs across the tech
industry.
Elon Musk halved Twitter’s head count this month after buying the
company, and last week Meta, the parent company of Facebook and Instagram,
announced it was laying off 11,000 employees, about 13 percent of its
workforce. Lyft, Stripe, Snap, and other tech firms have also laid off workers
in recent months.
Brad Glasser, an
Amazon spokesperson, declined to comment.
The pandemic
produced Amazon’s most profitable era on record, as consumers flocked to online
shopping and companies to its cloud computing services. Amazon doubled its
workforce in two years and funneled its winnings into expansion and
experimentation to find the next big things.
But earlier this
year, Amazon’s growth slowed to the lowest rate in two decades, as the bullwhip
of the pandemic snapped. The company faced high costs from decisions to
overinvest and rapidly expand, while changes in shopping habits and high
inflation dented sales.
Amazon
experienced a slight rebound in its latest quarter. But it has cautioned
investors that growth could weaken again, possibly falling to its lowest pace
since 2001.
Last week,
Amazon executives met with institutional investors, according to three people,
just as its stock sank to its lowest level since the early days of the
pandemic, erasing $1 trillion in value since Andy Jassy took over as CEO last
year.
Jassy, who
previously ran Amazon’s lucrative cloud computing business, has been closely
scrutinizing businesses to trim costs quickly. He initially pulled back on a
warehouse expansion that was supercharged during the pandemic, then moved to
other parts of the company.
In recent months, Amazon has also closed or pared
back a smattering of initiatives, including Amazon Care, its service providing
primary and urgent health care that failed to find enough customers; Scout, the
cooler-size home delivery robot, that employed 400 people, according to
Bloomberg; and Fabric.com, a subsidiary that sold sewing supplies for three
decades.
From April
through September, it reduced head count by almost 80,000 people, primarily
shrinking its hourly staff through high attrition.
Amazon froze
hiring in several smaller teams in September. In October, it stopped filling
more than 10,000 open roles in its core retail business. Two weeks ago, it
froze corporate hiring across the company, including its cloud computing
division, for the next few months.
That news came
so suddenly that recruiters did not receive talking points for job candidates
until almost a week later, according to a copy of the talking points seen by
The New York Times.
John Blackledge,
an analyst at Cowen & Co. who has covered Amazon for a decade, said his
calculations showed Amazon’s core e-commerce business had been losing billions
this year. “They need to review everything,” he said. “This is just not
sustainable.”
Amazon’s retail
business, which covers its physical and online retail business and its
logistics operations, has been under strain after the surge of demand and
breakneck expansion during the pandemic. The company has said it pulled back
expansion plans, and has told investors it sees uncertainty with consumers.
“We’re realistic that
there’s various factors weighing on people’s wallets,” Brian Olsavsky, the
finance chief, told investors last month. He said the company was unsure where
spending was heading, but “we’re ready for a variety of outcomes”.
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