Up to 18,000 Amazon workers in firing line as it chops cost

Amazon is set to make around 18,000 job cuts, with tech teams among those bearing the brunt of the losses.

The move followed CRM giant Salesforce’s decision to slash about 10 percent of its 73,000 workforce while taking a financial hit of $1.4 billion to $2.1 billion, announced yesterday.

The global online retailer and cloud company is set to slash around 5 percent of its workforce — largely in the areas of devices and books, technology services and stores — which is considerably higher than the 10,000 estimated in November.

In a blog published last night, CEO Andy Jassy, who founded AWS, said the pace of recent hiring combined with current economic uncertainty forced it to make the cuts.

“Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles. Several teams are impacted; however, the majority of role eliminations are in our Amazon Stores and People Experience and Technology organizations,” he said.

He said the company was working to support those who will lose their jobs. Packages include a separation payment, transitional health insurance benefits, and external job placement support.

Jassy added that Amazon would be “inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles.” Venturing into a ponderous tone, the CEO pointed out that the leadership principle “Invent and Simplify” applied to “finding a way to do more for customers at a lower cost” as well as tech innovation.

Amazon has been hit by the return of in-store shopping after Covid-related restrictions were lifted across the globe. Online sales fell during the first half of 2022 but grew 7 percent in the third quarter compared to the prior year. The company has also been hit by increasing fuel prices, inflation and supply chain difficulties.

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Amazon this week agreed an $8 billion unsecured loan from several unnamed lenders, according to a Securities and Exchange Commission filing [PDF] on Tuesday. The brown box shifter later told Reuters “the uncertain macroeconomic environment” meant it was using “different financing options to support capital expenditures, debt repayments, acquisitions, and working capital needs.”

In November last year, reports claimed Amazon’s Worldwide Digital unit, where Echo smart speakers and Alexa voice technology are nested, hit an operating loss of over $3 billion. It was claimed the vast majority of the losses were tied to Amazon’s Alexa and other devices. Amazon responded that it was as committed as ever to Echo and Alexa would “continue to invest heavily in them.” ®