Andy Jassy to Fire 10K Employees, But Amazon Layoffs Might Turn Uglier!

Amazon layoffs by Jeff Bezos will surely upturn the tech landscape of the world

Multinational tech giant Amazon plans to lay off around 10,000 people in its corporate and technology sectors starting as soon as this week, the New York Times reported. When executed, this would be the largest job cut in the company's history. The job cuts are expected in Amazon's devices organization, including the voice-assistant Alexa, as well as in its retail division and in human resources, said the report.

Laying off around 10,000 people would actually mean dismissing roughly three percent of Amazon's corporate employees and less than one percent of its global workforce of more than 1.5 million, which mainly consists of hourly workers. This planned retrenchment comes during the holiday season, a time when the company has valued stability in the past years. This shows how the souring global economy has pushed Amazon to trim business.

Ironically, just a few months back the e-commerce giant more than doubled the cap on cash compensation for its tech workers, in a bid to retain its employees in a competitive labor market. The changing business models and the looming recession in the global economy have triggered layoffs across tech companies. From April-September, the company reduced its headcount by almost 80,000 people, primarily reducing its hourly staff through high attrition. Recently, Amazon closed its Amazon Care, which provided primary and urgent health care services. It also shut Scout, the cooler-size home delivery robot and Fabric.com

In September, Amazon froze hiring in several smaller teams. And in October this year, the company stopped filling more than 10,000 open roles in its core retail business. And two weeks ago, it stopped corporate hiring for the next few months.

Experts believe that the main reason is the contraction in demand as the world comes out of the Covid-19 pandemic. The pandemic-induced lockdowns forced people indoors and made them buy more online, spend more time on social media sites, consume more streaming content, and play games with others, are almost over.

This started showing in the numbers of tech companies that were riding a boom for the past few years and hired to sustain the increased demand. As people return to offices and rediscover the outdoors, engagement across platforms is dropping, along with revenue. As a result, fewer people are needed to manage these platforms. Companies that thought the pandemic bump will be sustained by changed user behavior are realizing this is not the case.

To make matters worse, there are indicators that a global recession is in the offing and is already hitting demand for non-essential products in many markets. A purchase that can be put off, is being deferred in many cases.

For workers, Amazon has been one of the most stable employers in tech. The layoffs, which have not yet been officially announced by Amazon, will be the largest in the company's history. Amazon trimming its workforce is a signal that consumer sentiments are low, especially weeks before the holiday season which is usually the best time of the year for e-commerce. Amazon is expected to lay off workers in the devices vertical as the spike in demand for Alexa devices starts muting across the world.

The most significant trimming has come from Meta, the parent company of Facebook, which seems impacted by falling engagement on its platforms coupled with ad tracking policies, which have impacted the effectiveness of campaigns on its platforms. Meta laid off over 11,000 workers last week. The more visible trimming, however, has been at Twitter, following Elon Musk's takeover of the micro-blogging platform. He claims the sackings are needed to rationalize the platform's business model.