Amazon CEO Andy Jassy announced that the company will be laying off more than 18,000 employees, a significant increase from the previously disclosed workforce reduction. The layoffs will primarily affect the e-commerce and human resources departments and represent 6% of Amazon’s roughly 300,000 corporate employees. This news comes as a surprise, as the company recently raised its base pay ceiling in order to attract top talent.
This move by Amazon follows a trend in the tech industry, as more than 150,000 workers have lost their jobs in 2022 according to tracking site Layoffs.fyi. Salesforce, for example, announced on Wednesday that it plans to eliminate about 10% of its staff, numbering nearly 8,000 as of October 31st. Amazon’s job cuts are even larger than the 11,000 cuts announced last year by Facebook parent company Meta Platforms.
The reason for the layoffs is due to the uncertain economy and Amazon’s rapid hiring over the past several years, according to Jassy’s public staff note. The company has been bracing for potentially slower growth, as soaring inflation has caused businesses and consumers to cut back on spending. In the past year, Amazon’s share price has also been halved.
The layoffs at Amazon come as a contrast to the company’s essential role during the pandemic, as it delivered goods to homes under lockdown. However, Amazon may have overbuilt for demand and is now facing the consequences. Despite the job cuts, Jassy assured employees that the company has weathered difficult economies in the past and will continue to do so. Amazon will be paying severance and will be filing the necessary legal notices for mass layoffs. The affected employees will be informed starting January 18th.
