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Monday, May 27, 2024

Amazon may sack 10000 employees in its devices, retail, HR divisions

Amazon is rumored to be planning to lay off thousands of workers. The nearly 10,000 job layoffs, which may begin as soon as this week, would be concentrated in the company’s devices segment, retail division, and human resources.

According to those familiar with the situation, Amazon plans to let off around 10,000 workers in corporate and technical departments as soon as this week, in what would be the greatest employment reduction in the company’s history.

According to the people who spoke on the condition of anonymity because they were not authorized to talk publicly, the layoffs will target Amazon’s devices department, which includes the voice assistant Alexa, as well as its retail sector and human resources.

According to one source, the number of layoffs is still flexible and will likely be implemented team by team rather than all at once as each firm completes its planning.

However, if it remains around 10,000, it would represent around 3% of Amazon’s corporate employees and less than 1% of its worldwide labor force of more than 1.5 million, the most of whom are hourly workers.

Amazon’s planned retrenchment during the important holiday shopping season — when the firm has always prioritized stability — demonstrates how swiftly the global economy has put pressure on it to cut operations that have been overstaffed or underperforming for years.

Amazon would also become the latest technological corporation to lay off staff, whom it had only recently fought to keep.

This year, the e-commerce behemoth more than quadrupled the cash compensation threshold for its tech staff, citing “a extremely competitive labor market.”

Changing business models and a shaky economy have triggered layoffs across the IT industry. Elon Musk cut Twitter’s staff count in half after purchasing the firm earlier this month, while Meta, the parent company of Facebook and Instagram, revealed last week that it was cutting off 11,000 people, or around 13% of its workforce. Lyft, Stripe, Snap, and other technology companies have also let off employees in recent months.

On two years, Amazon more than quadrupled its workforce and invested its profits in development and experimentation to uncover the next great thing.

However, during this year, Amazon’s growth fell to its worst rate in two decades, as the pandemic’s bullwhip snapped. Rising expenditures were incurred as a result of the company’s choice to overinvest and aggressively grow, while changes in buying patterns and high inflation hampered sales.

In the most recent quarter, Amazon enjoyed a minor comeback. However, it has warned investors that growth might slow again, potentially to the worst rate since 2001.

The corporation has already warned Wall Street that it has tightened its belt and would do so again. During the dot-com bust in 2001, Amazon slashed 1,500 positions, including hourly workers, accounting for 15% of their workforce at the time. After another period of fast expansion, it also lay off a few hundred corporate staff in early 2018.

According to three sources, Amazon officials met with institutional investors this week, just as its stock fell to its lowest level since the early days of the epidemic, wiping out $1 trillion in value since Andy Jassy took over as CEO last year. Mr. Jassy, who formerly managed Amazon’s profitable cloud computing unit, has been aggressively evaluating firms in order to swiftly reduce expenses.

From April to September, it decreased its workforce by about 80,000 individuals, mostly via significant attrition among hourly employees. In September, Amazon halted hiring in numerous smaller teams.

According to a copy of the talking notes obtained by the media, recruiters did not receive talking points for job hopefuls until nearly a week later. According to John Blackledge, an analyst at Cowen & Company who has watched Amazon for a decade, Amazon’s main e-commerce company has been losing billions this year.

He stated, “They need to go through everything.  This is just not sustainable.”

Internally, devices and Alexa have always been viewed as vulnerable to budget cuts. Between 2017 and 2018, Amazon more than quadrupled the number of engineers working on Alexa and Echo devices to 10,000.

Hundreds of millions of Alexa-enabled gadgets have been sold by the corporation. However, Amazon has stated that the items are frequently low margin, and other potential revenue streams, such as voice shopping, have yet to catch on.

According to a person familiar with the economics, Echo and Alexa lost around $5 billion in 2018. When Amazon unveiled new devices last autumn during an annual event, it was much more restrained than in previous years, when it had included crazy goods such as a sticky note printer and a $1,000 house robot.

Amazon’s retail division, which includes its physical and online retail operations as well as its logistical operations, has been strained as a result of the pandemic’s rise in demand and quick expansion.

The firm has stated that it has scaled back its expansion ambitions and has informed investors that it perceives customer uncertainty.

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