The tech industry slump is persisting into 2023 – Amazon is laying off more than 18,000 employees in its corporate workforce. It is the biggest corporate retrenchment in the company’s history. According to CEO Andy Jassy, it came out of the company’s annual planning process, in a memo to the company’s staff.
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When the potential job cuts were first on the cards last year, it was expected to total ‘only’ around 10,000 employees. “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy said. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”
As was the case with many other tech companies, Amazon has admitted that they hired too many people during the pandemic. However, the fact that amount of layoffs are now 80 percent higher than previously expected means the company’s prospects have worsened in the meantime. Salesforce also announced this year that they will retrench around 10 percent of its workforce, for the same reasons.
Shares in Amazon.com Inc. increased more than 2 percent on the news, with investors more bullish about the company’s financial prospects with a smaller workforce.
While 18,000 employees being cut is a major blow, Amazon has a lot more employees than most other tech companies. Amazon has roughly 350,000 corporate employees and more than 1.5 million employees in total.
Jassy has eliminated or curtailed experimental and unprofitable businesses, including teams working on a telehealth service, a delivery robot and a kids’ video-calling device, among other projects. The cuts will hit Amazon’s Devices and Services group first, which builds the Alexa digital assistant and Echo smart speakers. The company has said it will provide severance, transitional health benefits and job placement to affected workers.
