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Amazon plans to lay off 10,000 employees

Written by Jimmy Rustling, Inc. plans to cut 10,000 jobs as soon as next week, the largest layoffs in the company’s history and the latest mass firings by technology companies.

The cuts will focus mostly on the devices division, which develops Amazon’s Alexa, as well as the retail division and human resources, the New York Times reported, citing people close to the matter.

If the cuts total 10,000, that would be 3% of Amazon’s corporate employees and less than 1% of its global workforce.1


Amazon plans to lay off 10,000 employees
Other companies, like Meta and Twitter, have also laid off thousands of employees in the last month
The top 5 technology companies by revenue have seen a nearly $4 trillion loss in market value this past year

Tech Layoffs

The threat of a looming recession has led major tech companies to fire significant portions of their staffs.2

Elon Musk fired half of Twitter. Inc.’s staff in October, and last week Facebook’s parent company, Meta Inc., said it would fire 11,000 employees, or 13% of its overall workforce.

Online retail companies like Amazon have also had massive layoffs. GoPuff, the consumer goods and food delivery company, had four rounds of layoffs throughout 2022, totaling 2,300 fired employees.2

Lyft, Inc.; Stripe, Inc.; Peloton Interactive, Inc.; and other major technology companies have all had major layoffs in the last few months.

The cuts come after many corporations overhired during the pandemic, when e-commerce and social media companies experienced a massive boom. Microsoft, Meta, and Google’s parent company Alphabet expanded their staff by upward of 20% in the 12 months through September 30.3

Amazon’s Decline

Amazon also grew during the pandemic. Not only was it the most profitable era for the company on record, but Amazon also doubled its workforce from the beginning of 2020 to the end of 2021.4

The company, like others that thrived during the first year of pandemic, has not done as well in the last year. The top five technology companies by revenue have lost almost $4 trillion in market value this past year, with Amazon becoming the first company to lose $1 trillion in market value on Wednesday.5

New Amazon CEO Andy Jassy has looked to pull back and cut costs since taking over last year. One area he looked specifically into was the device unit that produces Alexa, and internal documents show that in recent years it has been operating at a loss of more than $5 billion per year.6

Last week, Amazon executives met with institutional investors, according to three people, just as its stock sank to its lowest level since the early days of the pandemic, erasing $1 trillion in value since Andy Jassy took over as chief executive last year.

Mr. Jassy, who previously ran Amazon’s lucrative cloud computing business, has been closely scrutinizing businesses to trim costs quickly. He initially pulled back on a warehouse expansion that was supercharged during the pandemic, then moved to other parts of the company.

In recent months, Amazon has also closed or pared back a smattering of initiatives, including Amazon Care, its service providing primary and urgent health care that failed to find enough customers; Scout, the cooler-size home delivery robot, that employed 400 people, according to Bloomberg; and, a subsidiary that sold sewing supplies for three decades.

From April through September, it reduced head count by almost 80,000 people, primarily shrinking its hourly staff through high attrition.

Amazon froze hiring in several smaller teams in September. In October, it stopped filling more than 10,000 open roles in its core retail business. Two weeks ago, it froze corporate hiring across the company, including its cloud computing division, for the next few months.

That news came so suddenly that recruiters did not receive talking points for job candidates until almost a week later, according to a copy of the talking points seen by The New York Times.

John Blackledge, an analyst at Cowen & Company who has covered Amazon for a decade, said his calculations showed Amazon’s core e-commerce business had been losing billions this year. “They need to review everything,” he said. “This is just not sustainable.”

Devices and Alexa have long been seen internally as at risk for cuts. Alexa and related devices rocketed to a top company priority as Amazon raced to create the leading voice assistant, which leaders thought could succeed mobile phones as the next essential consumer interface. From 2017 to 2018, Amazon doubled staff on Alexa and Echo devices to 10,000 engineers. At one point, any engineer getting a job offer for other Amazon roles was supposed to also get an offer from Alexa.

The company has sold hundreds of millions of Alexa-enabled devices. But Amazon has said the products are often low margin and other potential revenue sources such as voice shopping have not caught on.

In 2018, Echo and Alexa lost about $5 billion, said a person with knowledge of the finances. When Amazon introduced new devices this fall in an annual event, it was notably more restrained than past years when it had featured zany products like a sticky note printer and $1,000 home robot.

Amazon’s retail business, which covers its physical and online retail business and its logistics operations, has been under strain after the surge of demand and breakneck expansion during the pandemic. The company has said it pulled back expansion plans, and has told investors it sees uncertainty with consumers.

“We’re realistic that there’s various factors weighing on people’s wallets,” Brian Olsavsky, the finance chief, told investors last month. He said the company was unsure where spending was heading, but “we’re ready for a variety of outcomes.”

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About the author

Jimmy Rustling

Born at an early age, Jimmy Rustling has found solace and comfort knowing that his humble actions have made this multiverse a better place for every man, woman and child ever known to exist. Dr. Jimmy Rustling has won many awards for excellence in writing including fourteen Peabody awards and a handful of Pulitzer Prizes. When Jimmies are not being Rustled the kind Dr. enjoys being an amazing husband to his beautiful, soulmate; Anastasia, a Russian mail order bride of almost 2 months. Dr. Rustling also spends 12-15 hours each day teaching their adopted 8-year-old Syrian refugee daughter how to read and write.