Key Highlights
- In the coming months, Amazon plans to lay off nearly 20,000 employees.
- Layoffs include distribution center workers, technology staff, and corporate executives, nearly twice as previously reported, as the retail and cloud computing giant cuts back after going on a hiring spree during the pandemic.
According to anonymous sources, Amazon employees are ranked from level 1 to level 7, and staff is at all levels. The New York Times initially reported in mid-November that Amazon would enact mass layoffs, citing sources that said around 10,000 people would be laid off.
However, company managers have been told over the last few days that they should try to identify work performance problems among employees as part of an effort to lay off about 20,000 people.
Twenty thousand employees are the equivalent of about 6% of corporate staff and about 1.3% of the total 1.5 million-strong workforce of Amazon, including global distribution centers and hourly workers.
According to their company contracts, corporate staff has been told that employees will receive a 24-hour notice and severance pay. The layoffs would be the vast staff reduction in the company’s history.
Jassy, CEO of Amazon, said that their annual planning process expands into the new year. There will be more reductions in roles as leaders continue to make adjustments. The decisions will be shared with impacted employees and organizations in early 2023.
Jassy Says: Amazon Has To Cut Costs
Jassy spoke on the layoffs during an interview at The New York Times DealBook conference that they felt they needed to streamline the costs.
He said that Amazon’s retail business grew quickly during the early days of the pandemic, which forced them to make decisions at that time to spend a lot more money and to go much faster in building infrastructure that was never imagined. They knew that they might be overbuilding.
While enterprise IT spending is still anticipated to grow over the next year, the forecast needs to be stronger to alleviate the concerns of tech industry giants, especially those with big consumer retail businesses.
During rising interest rates, the war in Ukraine, high fuel costs, supply chain issues, and a decline in personal PC sales, several tech giants have announced layoffs in the last few months.
During its third-quarter earnings call with analysts, Amazon CFO Brian Olsavsky attributed the decline in growth to macroeconomic conditions that forced Amazon customers to cut down on expenditures to save money in the short run.
