Amazon plans to lay off 10,000 workers

Amazon joins Meta, Twitter and other tech companies. The e-commerce giant will lay off 10,000 people, reports the New York Times on November 14, 2022.

The layoffs are expected to begin this week and will focus on Amazon Device (which includes Alexa-enabled devices, Kindle binders, etc.), Retail (with both online and physical businesses and logistics operations) and human resources. This wave of layoffs promises to be the biggest ever recorded on Amazon. The detail by country is not known.

1% of your global workforce

10,000 employees, this is just under 1% of its global workforce, which included 1.5 million people at the end of 2021. But the number of layoffs is not entirely fixed and should be determined team by team rather than by team. just one time. An Amazon spokesperson declined to comment on the information to the NYT.

This announcement comes at the beginning of the Christmas season, it is one of the periods in which the company’s valuation remains stable. This shows how the current macroeconomic environment is putting pressure on the company to cut staff in divisions that have been overstaffed for years.

The macroeconomic context affects many companies. Meta announced last week that it was laying off 11,000 people, or 13% of its workforce. Twitter, recently acquired by Elon Musk, is also laying off people en masse. Lyft, Stripe, Snap and other companies are on the same path. This underscores the real shift in the once ultra-competitive job market: tech companies were doubling down on efforts and perks to retain the workforce that was being stolen by competitors.

Health and robotics divisions already affected

With the pandemic, Amazon has reached its most profitable period: individuals have turned to its e-commerce platform and companies to its cloud service. The American doubled its workforce in two years and focused on expanding its services and experimenting to find the next big thing. But Amazon’s growth slowed at the start of the year as the positive effects of the pandemic on its business dissipated. The company, the NYT explains, faces significant costs following its decisions to invest heavily and expand, even as consumer habits change and inflation affects sales.

Andy Jassy, ​​the new head of Amazon, has been looking at the various activities to determine where you can cut costs quickly. Initially, he halted the expansion of warehouses, before looking at other divisions. The stoppage of the Amazon Care activity was announced (it offers medical consultation and teleconsultation services). This was followed by the abandonment of testing its Scout delivery robot and the downsizing of its division working on this project (which had 400 employees). As well as the closure of Fabric.com, a store that sells sewing equipment for professionals.

Low margin on devices

But this is not enough. The Amazon Device division, made up of Amazon-designed electronics and its Alexa voice assistant, has long been viewed internally as at risk of layoffs. Alexa and related devices became a priority for the company as it entered the race to develop a voice assistant seen in its infancy as a successor to smartphones as the next consumer interface. From 2017 to 2018, the workforce working on Alexa and Echo devices doubled to 10,000 engineers.

Amazon has sold hundreds of millions of devices, but the margin is low on these products. And other potential sources of revenue, such as voice commerce, failed to attract customers and generate the expected revenue. Hence the layoffs that are coming in this division, as well as in its retail activity and in its human resources.

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