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Layoffs That Could Reach 10,000 Employees Follow Job Cuts Similar to Those Already Adopted by Other Companies in the Technology Sector.
The e-commerce giant Amazon announced on the morning of Tuesday (15) the largest layoff plan in its history: 10,000 people. The layoffs from the technology company, which may begin this week, are targeted at corporate employees and may primarily affect Amazon’s device businesses, which include its Alexa products, as well as human resources and retail. The retail unit was the main organization that had to respond to a slowdown in sales this year.
Layoffs in the Technology Sector Increase
The news follows a wave of layoffs across the technology sector, which fears a recession after years of rapid hiring. Last week, Meta, the parent company of Facebook, said it would cut more than 11,000 jobs, or 13% of its workforce, to contain costs.
Multinational Amazon, headquartered in Seattle, is forecasting a slowdown in sales growth for the holiday season, typically a profitable time. Last month, CFO Brian Olsavsky said the company saw signs of tighter budgets for shopping and continued to struggle with high inflation and energy costs. Since then, it mentioned that it would freeze incremental corporate hiring for several months.
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Across the company, considering warehouse and transportation jobs, which caused Amazon’s employee count to exceed 1.5 million on September 30, the planned cuts represented less than 1% of the retailer’s workforce.
Is the Technology Sector on Unstable Ground?
After years of impressive growth, the technology sector – a favorite among investors – is on unstable ground. The recent wave of layoffs follows months of warning signs, including technology startups, which are finding it harder to raise capital.
“The clock struck midnight on the hyper-growth of big tech companies,” said Dan Ives, financial analyst at Wedbush Securities, adding that significant job cuts at some of the largest companies in the tech sector mean “a recession is at hand.” Some economists have been warning about a potential recession for months.
Amazon, in particular, has been in expansion mode for most of its history, from the launch of its Prime subscriptions to pioneering cloud computing to the purchase of luxury grocery chain Whole Foods. The company, which generated US$ 469.8 billion in sales last year, said this summer that it would acquire healthcare network One Medical for US$ 3.9 billion.
Multinational Logistics Sector Continues Hiring New Employees
And Amazon’s warehouses continue to hire – the company cannot afford to reduce its logistics operations as it heads into the busiest shopping season of the year. The company said in October that it plans to add 150,000 workers nationwide for the holiday season, and there are no signs that it intends to reduce that number.
“Amazon will continue to be a powerhouse in retail and beyond,” Saunders said in a statement. “However, it will no longer have such easy growth. Its change in trajectory is a warning to others in retail, but it is also an opportunity for more agile players to examine how they can gain some market share.”
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