Amazon has launched significant lay-offs in its corporate ranks, making it the latest technology corporation to reduce its employees amid growing concerns about the overall economic outlook. The business alerted regional authorities in California on Tuesday that it would lay-off approximately 260 employees at multiple facilities that include data scientists, software engineers, and other corporate professionals. The employment losses would take the effect on January 17.
Amazon will not say how many further layoffs were planned in addition to those verified under California’s Worker Adjustment and Retraining Notification Act, generally known as WARN, which requires employers to provide 60 days’ notice if they have 75 or more full-time or part-time employees. Amazon employs around 1.5 million people worldwide, the vast majority of whom are hourly employees.
During the COVID-19 pandemic, online retail companies, like other internet and social media behemoths, made substantial profits as homebound buyers purchased more things online. However, revenue growth slowed as the pandemic’s worst effects faded and consumers relied less on e-commerce.
Losses and Lay-offs
This year, the Seattle-based company recorded two straight losses, primarily due to write-downs of the value of its equity stake in Rivian Automotive. The company returned to profitability in the third quarter, but investors were pessimistic about its lower-than-expected revenue and bleak forecasts for the current quarter, which is generally strong for retailers owing to the holiday shopping season.
Amazon has previously lay-offs some of its ventures in an effort to reduce expenses, including subsidiary fabric.com, Amazon Care, and the cooler-sized home delivery robot Scout. It has also reduced its physical footprint by postponing or scrapping plans to move into additional warehouses across the country. And, according to Amazon Chief Financial Officer Brian Olsavsky, the company is planning for a slower growth era and will be cautious in recruiting in the near future.
Although mass lay-offs are uncommon at Amazon, the company did have rounds of employee losses in 2018 and 2001 during the dot-com bust. The e-commerce behemoth often reduces its warehouse employees through attrition.
Faced with rising costs, the firm stated earlier this month that it will halt corporate hiring, adding to the freeze it imposed on its retail segment a few weeks ago. But lay-offs were not far away. According to LinkedIn posts, employees from various departments, including voice assistant Alexa and cloud gaming platform Amazon Luna, were part of laid off on Tuesday. Some of them worked in Seattle, where the corporation runs.
The team’s senior vice president, David Limp, stated on Amazon’s website that the business was streamlining several teams and programs. Those affected by the process, he added, were contacted on Tuesday, and the company will work with them to “offer support,” including assistance in finding new jobs. Limp stated that if an employee is unable to find a new position within the firm, Amazon will provide a severance package, external job placement assistance, and what he refers to as transitional benefits.
The retail powerhouse follows other tech behemoths in lay-offs employees in recent weeks, reversing a trend from earlier this year, when tech personnel was in great demand. Meta, the parent company of Facebook, announced last week that it would lay-off 11,000 employees, or around 13% of its staff. Elon Musk, the new CEO of Twitter, cut the company’s personnel in half earlier this month.
According to Wedbush Securities analyst Daniel Ives, Amazon will likely maintain its personnel and investments in profitable sectors such as the cloud computing arm AWS, while cutting spending in non-strategic areas such as Alexa and other moonshot projects in the future. These lay-offs have been cause of concern worldwide.
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