A report from two American news outlets revealed that Amazon, the multinational e-commerce company that’s worth $1 trillion, plans to lay off about 10,000 corporate and technology employees this week, an anonymous source told the news outlet. The company has more than 1.5 million employees, of which most are paid hourly.
The layoffs come shortly after Meta* announced last week that they’re firing more than 13% of their staff (11,000 people) after their company’s value dropped from $1 trillion down to around $250 billion, as well as after Twitter fired about half of its workforce since Elon Musk, the leader of Tesla and SpaceX, bought the company for $44 billion. Musk defended in a tweet the layoffs on the basis that Twitter was losing over “$4 million a day.”
Andy Jassy, the CEO of Amazon who took on his role in July of 2021, plans to lay off employees and freeze hiring in the retail section of their company during a time when the company usually increases its numbers of employees to meet holiday shopping demands.
The cut also shows a grim sign for other businesses this season. Google, YouTube, and Meta* also reported a second-straight decline in revenue this third-quarter. The losses come as advertisers and marketers, who these companies rely on, are pulling back spending in a worsening economy.
At the end of 2019 Amazon had about 800,000 employees, and by December 31, 2021, that number had grown to 1.6 million.
In recent months, Amazon also shut down their telehealth service, axed one of their new products called “Amazon Glow,” a video-calling device for kids which resembles a large smartphone, as well as a delivery robot. Additionally, the company closed all but one call center in the United States, and shut down 68 brick-and-mortar stores.
The company announced it will remain committed to Alexa despite major cuts to their device division, though the department loses about $5 billion every year. It's expected that layoffs may unfold with workers focused on the voice assistant device, which founder Jeff Bezos saw as his pet project. Amazon had earlier hired about 10,000 engineers to focus on the gadget between 2017 and 2018.
Amazon is on pace for its worst since 2008, having its stock down about 41% for the year, after reports of its third-quarter earnings in October had scared off investors causing shares to plummet more than 13%.
“They need to review everything,” said John Blackledge, an analyst who has covered Amazon for a decade, and predicts that they have lost billions this year. “This is just not sustainable.”