Amazon: A mass layoff, also known as a large-scale layoff or workforce decrease, takes place when a company discharges a large number of staff all at once.
This could be brought on by several things, like a decline in revenue, a business reorganization, or the outsourcing of some positions.
In 2022, many well-known companies announced the termination of hundreds of thousands of employees.
Having previously championed the cause, Amazon has stated that it will continue to let people go.
The news
Amazon is one of the biggest and most profitable e-commerce companies in the world.
The company started as an online bookstore but soon escalated into selling a variety of products, including electronics, clothing, and home items.
Along with its online store, Amazon also offers cloud computing and streaming services.
According to recent sources, Amazon is reportedly letting go of more than 18,000 employees.
The company revealed that the choice was made in response to the bleak prospects for the global market.
Memo
Additional layoffs at the enormous online retailer will begin early next week, according to Andy Jassy, CEO of Amazon.
He explained the decision and documented it in a memo:
“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.”
Amazon, according to Jassy, has not yet decided how many new roles would be affected.
Each leader would decide and then consult with their teams.
A meeting of the management team to discuss cost-cutting strategies for the business was also mentioned in the memo.
Amazon’s executives emphasized the company’s sustainability and what its customers want.
“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.
Read also: Apple and Tesla suffer stock declines
The layoffs
In November, Andy Jassy said that Amazon would carry out employment cuts through the first quarter of 2023.
According to many news accounts, the e-commerce juggernaut apparently set a goal to fire over 10,000 employees last fall.
Amazon started its layoffs this week on Wednesday.
Amazon plans to reduce its personnel in order to seek long-term opportunities with a more viable cost structure.
Jassy acknowledged that many people struggle with it and that making the cuts is challenging.
“We don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted,” he added.
Amazon will start warning the impacted employees 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.”
Shifting habit
The e-commerce powerhouse witnessed record sales at the start of the pandemic.
Consumers altered the way they make purchases for practically all their needs.
However, Amazon suffered as a consequence of the price increases in 2022.
As more people started favoring in-person shopping, an area on which the company is currently focusing, consumer demand also fell.
Company stock
Amazon’s October holiday season forecast surprised Wall Street analysts as it was below what they had anticipated.
The company predicted final-quarter revenue between $140 and $148 billion, as opposed to the anticipated $155 billion.
The impact of rising inflation and recessionary fears on consumer spending led to an even worse estimate.
Amazon reported revenue of $127.1 billion for the third quarter.
It rose 15% above 2021 levels but came up short of Wall Street projections.
Other companies
Many CEOs and founders of tech firms admitted that they misjudged the pandemic demand.
Many companies are currently firing staff as a result.
Eleven thousand employees were laid off, making it the most extensive mass layoff in Meta’s history.
Elon Musk has been letting people go since spending $44 billion to buy Twitter.
Last week, Salesforce announced a 10% employee downsizing.
References:
Amazon will lay off more than 18,000 workers
Amazon stock falls 14% on light holiday quarter sales forecast
