Amazon to lay off 18,000 workers

Amazon said Wednesday that it will be cutting about 18,000 positions. It’s the largest set of layoffs in the Seattle-based company’s history, although just a fraction of its 1.5 million global workforce.

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” CEO Andy Jassy said in a note to employees that the company made public. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”

He said the layoffs will mostly impact the company’s brick-and-mortar stores, which include Amazon Fresh and Amazon Go, and its PXT organizations, which handle human resources and other functions.

In November, Jassy told staff that layoffs were coming due to the economic landscape and the company’s rapid hiring in the last several years. Wednesday’s announcement included earlier job cuts that had not been numbered. The company had also offered voluntary buyouts and has been cutting costs in other areas of its sprawling business.

“As part of our annual planning process for 2023, leaders across the company have been working with their teams and looking at their workforce levels, investments they want to make in the future, and prioritizing what matters most to customers and the long-term health of our businesses. This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” Jassy said in a message to workers.

“In November, we communicated the hard decision to eliminate a number of positions across our Devices and Books businesses, and also announced a voluntary reduction offer for some employees in our People, Experience, and Technology (PXT) organization. I also shared that we weren’t done with our annual planning process and that I expected there would be more role reductions in early 2023,” he continued.

“Today, I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles. Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles.”

Amazon intends to notify affected workers from January 18. It is likely that most will be concentrated in the United States, which is its biggest market and where most of its workers are based.

Last year, more than 150,000 tech jobs were cut, according to the website layoffs.fyi, which tracks company layoff announcements. Meta announced 11,000 layoffs, partially due to lack of interest in its metaverse plans; Elon Musk cut 7,500 workers from Twitter; the social network Snap laid off 20% of its workforce in August; bike maker Peloton announced 4,000 layoffs in October; and Netflix cut 500 emloyees.

While many tech companies thrived during the Covid-19 pandemic, the end of lockdown and the return to normalcy have hurt business. Strategic mistakes, over-hiring and the economic slowdown have worsened matters, leading to tens of thousands of layoffs. This is despite the strength of the US labor market, where the unemployment rate is at near 50-year lows. The year 2023 has not gotten off to a better start. Business software maker Salesforce also announced cuts on Wednesday. It said it is laying off about 8,000 employees, or 10% of its workforce.

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