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- Amazon follows Twitter and Meta’s suit in laying off employees
- The e-commerce company is about to lay off around 260 employees from various facilities.
- These layoffs will be effective from January 17, 2023
Amazon begins layoffs: Amid growing concerns over the macroeconomic environment, Amazon has begun massive layoffs in its corporate ranks. It also followed Twitter and Meta’s suit, becoming the latest tech company to trim its workforce.
The company’s notification to regional officials in California said it would lay off about 260 employees at various facilities, including data scientists, software engineers and other corporate employees. It further said that these layoffs would be effective from January 17.
Meanwhile, the tech company declined to say how many additional layoffs may be planned in addition to those confirmed by California’s Worker Adjustment and Retraining Notification Act (WARN), which mandates that employers provide 60 days’ notice to employees. Give notice if they have 75 or more full-time or part-time employees. Amazon employs over 1.5 million workers worldwide, mostly hourly workers.
Company sees slow revenue growth post COVID
Similar to other Internet and social media giants, the online retail giant saw significant revenue during the COVID-19 pandemic as homebound shoppers increased their online purchases. But when the pandemic subsided and customers shopped online less and less, the company saw slower revenue growth.
The Seattle-based business reported two consecutive losses this year, mainly due to a write-down of the value of its stock investment in Rivian Automotive, a start-up that produces electric vehicles.
Despite the fact that the merchant typically does well during the holiday shopping season, investors were unimpressed with the company’s weaker-than-expected revenue and disappointing forecast for the current quarter. Meanwhile, the company returned to profitability during the third quarter.
Amazon abandoned many of its projects
Amazon has begun winding down some of its projects in an effort to cut costs, such as subsidiary Clothing.com, Amazon Care and cooler-sized home delivery robot Scout.
Additionally, it is reducing its physical footprint by postponing or ending plans to occupy several new warehouses across the country.
Furthermore, according to Amazon CFO Brian Olsavsky, the company is preparing for a period of slower growth and will exercise caution when hiring new hires in the near future.
Mass layoffs are rare at Amazon, but the company has made job cuts in 2018 and during the dot-com crash in 2001. On the warehouse side, the e-commerce giant typically trims its workforce through attrition.
Faced with higher costs, the company announced earlier this month that it would freeze hiring among its corporate workforce, having put a halt to its retail division a few weeks ago. But the layoff was not far off.
According to a LinkedIn post, employees working in various units, including voice assistant Alexa and cloud gaming platform Amazon Luna, said they were let go on Tuesday. Some of them were located in Seattle, where the company is headquartered.
“As part of our annual operating plan review process, we always look at each of our businesses and consider what we believe should change,” Kelly Nantel, an Amazon spokeswoman, said in a statement. “As we go through this, given the current macro-economic environment (as well as several years of rapid hiring), some teams are making adjustments, which in some cases means certain roles are no longer necessary. “
In a statement posted on the company’s website, Dave Limp, senior vice president of devices and services, said Amazon is consolidating certain teams and programs.
Amazon vows to ‘provide support’ to sacked employees
Those fired in the process were notified on Tuesday and the company would work with them to “provide support,” including helping them find new roles, he said.
If an employee can’t find a new role within the company, Limp said Amazon will provide severance pay, external job placement support and what he calls transitional benefits.
The retail giant follows other tech giants that have cut jobs over the past few weeks. Among them, Facebook parent Meta said last week it would lay off 11,000 people, about 13% of its workforce. And Twitter’s new CEO Elon Musk cut the company’s workforce by half this month.
(with inputs from AP)
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