Why Did Amazon Begin Firing Approximately 10,000 Workers This Week?

According to a story from The New York Times, Amazon Begin Firing 10000 Workers in business and technical roles starting this week. Separately, The Wall Street Journal cited a person who claimed the business intended to fire thousands of workers.

On Monday, Amazon’s stock fell by nearly 2%.

According to the article, the cuts would be the biggest in the company’s history and would mostly affect Amazon’s devices department, retail division, and human resources. Less than 1% of Amazon’s global workforce and 3% of its corporate personnel would be affected by the alleged layoffs.

The report comes after layoffs at other tech companies. More than 11,000 employees at Meta were laid off last week, according to the firm’s announcement. Twitter cut over half of its workforce in the days after Elon Musk paid $44 billion to acquire the company.

Amazon Begin Firing 10000 Workers
Amazon Begin Firing 10000 Workers

As of December 31, 2021, Amazon has 1.6 million full- and part-time employees, a 102% increase from the 798,000 employees it claimed at the end of 2019. The total number of layoffs “remains flexible,” according to the New York Times, and might fluctuate.

An inquiry for comment was not immediately answered by an Amazon representative.

Amazon relies heavily on the holiday shopping season, and to satisfy demand, the corporation typically increases staffing levels during this time. However, since assuming the position of CEO in July 2021, Andy Jassy has been actively reducing costs to protect the company’s cash flow as it deals with sluggish sales and a dour global economy.

The corporation has already made preparations to halt corporate hiring in its retail division. In recent months, Amazon has terminated its telemedicine service, cancelled or postponed the opening of some new warehouse locations, closed all but one of its U.S. call centres, killed off its roving delivery robot, and shuttered underperforming brick-and-mortar chains.

In October, Amazon released poor third-quarter earnings that alarmed investors and sent its shares plunging more than 13%. It was the second time this year that Amazon’s results have been sufficient to provoke a double-digit percentage sell-off, and it was the first time the company’s market capitalization went below $1 trillion since April 2020. Days following the report, the stock’s epidemic rise was nearly completely erased by the sell-off that persisted for days.

The price of Amazon stock has fallen by approximately 41% so far this year, more than the S&P 500’s 14% decline, and it is on track to have its worst year since 2008.

10,000 business and technology workers may be let go by Amazon as soon as this week, according to reports. According to persons with knowledge of the situation, the company’s devices division, retail division, and human resources would be impacted by the cuts.

According to the site, the decision would result in the largest employment reduction in Amazon’s history, affecting 3% of its corporate staff and 1% of its worldwide workforce.

An inquiry for comment from FOX Business was not immediately answered by Amazon representatives.

According to people with knowledge of the situation, the move was made shortly after Amazon CEO Andy Jassy started a cost-cutting assessment of the company that included shuttering non-profitable divisions like its devices section.

As the corporation takes cuts in the face of the uncertain economic climate, sources told the Journal that Amazon had already urged staff in underperforming units to get ready to look for other employment.

Amazon started a recruiting moratorium for corporate posts earlier this month.

The decision was reached by Jassy and the leadership team owing to the “uncertain” economy and in light of how many people Amazon has employed recently, according to Beth Galetti, senior vice president of people experience and technology at Amazon, in a message to staff members.

We are dealing with a unique macroeconomic scenario, and we want to balance employing new employees and making investments with consideration for the economy, according to Galetti.

She pointed out that the business had previously suspended hiring in other divisions and had made the decision to stop all new corporate hiring.

Galetti added that Amazon planned to “leave this halt in place for the next few months” in order to continue monitoring the business and the economy and making adjustments as necessary.

In a tweet posted last month, former CEO Jeff Bezos also expressed his agreement with Goldman Sachs CEO David Solomon’s warning that there is a “good chance” of a U.S. recession, saying that “the probabilities in this economy tell you [to] batten down the hatches.”

Conclusion

A report from The New York Times says that Amazon plans to lay off about 10,000 corporate and technology workers starting this week. A different source told The Wall Street Journal that the company plans to let go of thousands of workers.

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