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Amazon Cuts 18,000 Jobs From its Global Workforce

Michael Otey

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AWS (Amazon Web Services)

Further fueling fears of a coming recession, Amazon has announced that it was laying off 18,000 of its employees. The 18,000 layoffs represent roughly 6 percent of Amazon’s workforce.

Amazon, headquartered in Seattle, is the second largest employer in the US behind Walmart. The online retailer employs 1.5 million people globally.

Most of the cuts will come from its consumer retail business and its human resources divisions. The profitable Amazon Web Services (AWS) cloud division was essentially untouched by this round of layoffs. In addition, hourly warehouse workers are not included in the layoffs — those jobs are typically continually cut back through high attrition.

Amazon hired a lot of new employees during the pandemic
Amazon hired a lot of new employees during the pandemic (image credit: Amazon.com)

Why is Amazon laying off all these employees?

Some analysts say the layoffs were inevitable because of the overly aggressive hiring that Amazon did to deal with the pandemic. Amazon recorded $127.1 billion in sales for the third quarter, which was up 15 percent from the prior year, showing that the nation’s high inflation did not reduce consumer spending.

Amazon was also profitable, making $2.9 billion after two quarters of losses. However, this past October, Amazon disappointed Wall Street with a holiday season forecast that missed analysts’ expectations. As a result, Amazon’s stock fell about 50% last year. Amazon also recently cautioned investors that future growth could weaken to its slowest rate since 2001.

In a memo to its employees Andy Jassy, Amazon CEO, stated, “This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years. In November, we communicated the hard decision to eliminate a number of positions across our Devices and Books businesses.”

He continued, “Today, I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles. Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles. Several teams are impacted; however, the majority of role eliminations are in our Amazon Stores and PXT organizations.”

In conclusion, Jassy stated that “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so.”

Amazon isn’t the only casualty in the high-tech market. Facebook parent Meta announced 11,000 job cuts, the most in the company’s history. Twitter also got rid of more than half of its workforce after Elon Musk bought the company for $44 billion. In addition, Salesforce announced last week its plans to cut 10% of its staff.

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