Brief Overview
| According to a report, Amazon layoffs 10,000 employees approximately in corporate and technology roles beginning this week. The most major job cuts in the e-commerce firm come at a time when other technology firms, such as Meta and Twitter, have also laid off several employees. |
The New York Times reported that e-commerce giant Amazon is planning to lay off 10,000 employees in its corporate and technology departments beginning this week, in what would be the most significant job cut in the company’s history.
Amazon’s devices organization, which deals with products like voice assistant Alexa, along with its retail division and human resources, will be targeted for layoffs. Amazon will likely lay off employees team by team rather than all at once.
According to The New York Times, laying off 10,000 employees would represent roughly 3% of the company’s corporate employees and less than 1% of its global workforce of nearly 16 lakh.
Who else has reported layoffs?
Several other technology companies have announced layoffs in recent weeks.
Twitter announced last week that it had laid off 50% of its global workforce after Tesla founder Elon Musk took over the microblogging platform on October 27.
In the same week, Meta ( parent company of Facebook ) CEO Mark Zuckerberg announced the layoff of over 11,000 employees, reducing the company’s workforce by 13%.
Lyft, Stripe, Snap, and other technology companies have also laid off employees in recent months.
Reason to Layoff
During the coronavirus pandemic, Amazon made record profits as consumers chose online shopping and businesses chose its cloud computing services. According to The New York Times, Amazon doubled its workforce in two years and used the profits to expand and experiment.
However, Amazon reported its slowest quarterly growth rate during the three months of April-June, with only a 7.2% increase in revenue as the pandemic’s highs began to fall. The company’s expansion and new investments began to incur high costs as a shift in consumers’ online shopping habits ate into sales revenue.
According to the newspaper, the losses have resulted in layoffs, as they have in the past. Amazon cut 1,500 jobs in 2001, accounting for 15% of its workforce at the time. After a period of rapid expansion, Amazon laid off a few hundred employees again in 2018.
According to The New York Times, Amazon Chief Financial Officer Brian Olsavsky told investors last month, “We’re realistic that various factors are weighing on people’s wallets.”
In recent months, the e-commerce company has shut down or reduced access to several of its products and services, including the health care scheme Amazon Care, which failed to attract customers, and Fabric.com, a division of the company that has sold sewing supplies for 30 years.
According to Bloomberg, Amazon is also closing its home delivery robot Scout division, which employed 400 people.
The company had frozen hiring in smaller teams in September. According to The New York Times, it halted hiring for over 10,000 jobs in its core retail business a month later. Two weeks earlier, It froze corporate hiring across the company over the next few months.
Between April and September, Amazon laid off approximately 80,000 employees, most of whom were hourly workers.
According to John Blackledge, an analyst at Cowen & Company, Amazon’s core e-commerce business has been losing billions this year, according to his calculations.
“Everything needs to be reviewed,” he said. “This is simply unsustainable.”
Meanwhile, amid job cuts, Amazon founder Jeff Bezos told CNN in an interview that he proposes to give away the majority of his $124 billion (approximately Rs 10.08 lakh crore) net worth to fight climate change and support those who can help unite humanity in times of deep social and political divisions.
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