Amazon has planned to lay off approximately 10,000 workers. These layoffs will pertain to corporate and technology units. Moreover, this will be the largest job cuts in the company’s history.
Job cuts in corporate and technology
According to New York Times, Amazon has initiated the largest job cuts during this week. The job cuts will apply on employees working in Amazon’s devices organization. The affected employees include workers from voice-assistant Alexa. In addition, the layoffs will also affect employees in retail divisions and human resources. Moreover, the U.S. media reported that the job cuts accounts to 3 percent of office staff. Previously, the e-commerce giant introduced a hiring freeze and discontinued some of its warehouse expansions. This is an indication that the company over-hired during pandemic in wake of increasing demand during that time period. The total number of layoffs remains fluid.
Amazon has joined tech companies to initiate layoffs
Moreover, this decision seems to be in line with Amazon’s decision to reduce its costs. “As part of this year’s review, we’re of course taking into account the current macro-environment and considering opportunities to optimize costs,” the company said in a statement last week. Amazon has become the latest technology company to lay off its workers. Surprisingly, Amazon was fighting to retain its workers in a tight labor market few months back. The Great Resignation era which lasted till few months back forced the company to double the cap on cash compensation for its tech workers. The company cited competitive job market as the reason for this decision.
Reduction in profitability
The pandemic era proved to be a highly profitable period for Amazon as the demand for online purchases went up. However, the lifting of lockdown restrictions, consumers are moving back to physical purchases. Hence, Amazon is facing reduction in the profit margin. Amazon’s growth slowed to the lowest rate in two decades during this year. This is a sign that the company is over staffed and job cuts was on the cards.
Despite several media reports, Amazon did not comment on the matter.
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