A new report from the New York Times says Amazon is preparing to lay off roughly 10,000 employees in the coroprate and technology divisions, beginning this week.
It will be the largest reduction in workforce in the company’s history, with its primary impact focusing on the company’s devices organization, retail division, and human resources. The layoffs will reportedly affect less than 1% of Amazon’s global workforce, and 3% of corporate employees.
Amazon will now add its name to the list of tech firms laying off employees as they run into the macroeconomic headwinds of the global downturn. Last week Meta announced it would be cutting back 13% of its workforce, or over 11,000 employees. Twitter cut roughly 50% of its workforce following Elon Musk’s takeover of the company.
At the end of 2019, Amazon reported it had 798,000 employees, but by the end of 2021, the company had 1.6 million full and part-time staff. It was a 102% increase. The New York Times reported that the total number of layoffs “remains fluid,” and capable of change.
Historically Amazon has increased its headcount ahead of the critical holiday shopping season. However as the company has faced declining sales due to a slowing economy and dimming consumer sentiment due to the effects of inflation on pocketbooks, CEO Andy Jassy has been seeking to preserve cash through cost-cutting.
Amazon had already announced a hiring freeze for corporate roles in its retail sector. In the last few months, the company shut down its telehealth service, discontinued a video-calling projector for children, closed all of its call centers save for one, closed underperforming brick and mortar locations, and has closed, canceled, or is delaying the opening of new warehouse locations.
Third quarter earnings for Amazon had proven disappointing, and had spooked investors, triggering a sell-off that sank shares over 13%. It was the first time Amazon’s market capitalization dropped below $1 trillion since April of 2020. The sell off persisted long after the report, and eliminated almost all of the stock’s pandemic growth.
Now down about 41% for the year, far beyond the 14% drop in the S&P 500, Amazon is on track to have its worst year since 2008.
