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Amazon: Mass layoffs, also known as large-scale layoffs or workforce reduction, refer to the practice of a company dismissing a significant number of employees at the same time.
This can happen for various reasons, such as a decline in business, restructuring the company, or outsourcing certain functions.
2022 was a year that witnessed several major corporations announce laying off hundreds of thousands of workers.
Although it has already joined the movement, Amazon says it will continue to lay off employees.
The news
Amazon is one of the world’s largest and most successful online retailers.
The company initially started as an online bookstore but quickly diversified to sell various products, including electronics, clothing, home goods, and more.
In addition to its online retail business, Amazon also offers cloud computing and streaming services.
According to reports, Amazon is laying off more than 18,000 employees.
The company explained that the decision was made due to the worsening global economic outlook.
Memo
Andy Jassy, the CEO of Amazon, said the e-commerce giant would continue its layoffs early next week.
He released a memo that elaborated on the decision, saying:
“Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments.”
“Those decisions will be shared with impacted employees and organizations early in 2023.”
According to Jassy, Amazon has yet to conclude how many other roles will be affected.
However, each leader will communicate with their respective teams when they come to a conclusion.
Additionally, the memo said executives recently met to decide how to trim the company.
Amazon executives will also prioritize what customers value and the business’s long-term health.
“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” said Jassy.
The layoffs
In November, Andy Jassy said job cuts at Amazon would continue into early 2023.
Several media outlets reported last fall that the e-commerce giant set a goal of cutting over 10,000 employees.
On Wednesday, Amazon started the layoffs.
The decision to cut jobs is supposed to help Amazon pursue long-term opportunities from a more robust cost structure.
Jassy acknowledged that the cuts are a difficult decision and that it is difficult for people.
“We don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted,” he added.
The e-commerce giant will start informing the affected staff on January 18.
“It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating,” said Jassy.
“But rather, people with emotions, ambitions, and responsibilities whose lives will be impacted.”
Read also: Retailers have Grim Expectations with the 2023 Market
Shifting habit
The e-commerce giants enjoyed a booming business at the onset of the pandemic.
Consumers shifted their habits to online shopping for nearly everything they needed.
However, Amazon was struck hard by the surging inflation in 2022.
In addition, consumers demand dwindled as people started opting for in-person shopping, an area the company is currently focusing on.
Company stock
In October, Wall Street analysts were disappointed with Amazon’s holiday season forecast as it missed their expectations.
The company expected revenue for the final three months to stand between $140 and $148 billion, which was significantly lower than the expected $155 billion.
Rising inflation and recessionary fears affected consumer purchasing decisions, leading to a weaker forecast.
Amazon reported revenue of $127.1 billion for the third quarter.
While it was a 15% increase from 2021, it missed Wall Street estimates.
Other companies
Several tech companies, founders, and CEOs admitted failing to gauge pandemic demand.
As a result, many are cutting off staff.
Meta recently announced it was laying off 11,000 employees, the largest mass layoff in the company’s history.
Meanwhile, after buying Twitter for $44 billion, Elon Musk has been cutting jobs from the company left and right.
This week, Salesforce announced it was cutting off 10% of its employees.
References:
Amazon will lay off more than 18,000 workers
Amazon stock falls 14% on light holiday quarter sales forecast
