Amazon to slash over 18,000 jobs as e-commerce giant escalates cutbacks

E-commerce giant Amazon began laying off staff in its device division in November, with sources at the time saying the firm was targeting 10,000 job cuts. PHOTO: AFP

LOS ANGELES – Amazon.com is laying off more than 18,000 employees, a significantly bigger number than previously planned, in the latest sign that a technology slump is deepening.

The new figure would be the largest number of cuts revealed so far at a major tech company.

Chief executive officer Andy Jassy announced the cutbacks in a memo to staff on Wednesday. The cuts, which began last year, were previously expected to affect about 10,000 people.

The company plans to begin discussing the moves with affected employees on Jan 18, he said.

The reduction is concentrated in the firm’s corporate ranks, mostly Amazon’s retail division and human resources functions like recruiting.

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Mr Jassy said. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”

In Singapore, Amazon had about 2,000 full-time and part-time employees as at October 2021. It opened a new three-storey office at Asia Square Tower 1 that month as it scaled up its presence here.

When contacted, Amazon Singapore had no further comment.

Although the prospect of layoffs has loomed over Amazon for months – the company has acknowledged that it hired too many people during the pandemic – the increasing total suggests that the company’s outlook has darkened. It joins other tech giants, from Meta Platforms to Microsoft, in slashing thousands of jobs in preparation for a recession.

Earlier on Wednesday, Salesforce announced plans to eliminate about 10 per cent of its workforce and reduce its real estate holdings.

Amazon investors gave a positive reaction to the latest belt-tightening efforts, betting that these may bolster profits at the e-commerce company. The shares climbed nearly 2 per cent in late trading on Wednesday after the Wall Street Journal first reported on the plan.

Eliminating 18,000 workers would be the biggest cut yet for tech companies during the current slowdown, but Amazon also has a far bigger workforce than its Silicon Valley peers. It had more than 1.5 million employees as at the end of September, meaning the latest cuts would represent about 1 per cent of the workforce.

At the time that the company was planning its cuts in November, a spokesman said Amazon had roughly 350,000 corporate employees worldwide.

The world’s largest online retailer spent the end of last year adjusting to a sharp slowdown in e-commerce growth as shoppers returned to pre-pandemic habits. Amazon delayed warehouse openings and halted hiring in its retail group. It broadened the freeze to the company’s corporate staff and then began making cuts.

Mr Jassy has eliminated or curtailed experimental and unprofitable businesses, including teams working on a telehealth service, a delivery robot and a children’s video-calling device, among other projects.

The first wave of cuts landed heaviest on Amazon’s Devices and Services group, which builds the Alexa digital voice assistant and Echo smart speaker, among other products.

The group’s chief told Bloomberg last month that layoffs in the unit totalled fewer than 2,000 people, and that Amazon remained committed to the development of the voice assistant.

In Wednesday’s memo, Mr Jassy said the company would provide severance and transitional health benefits as well as job placement to affected workers. He also chided an employee for leaking the news, an apparent reference to the WSJ report.

“Companies that last a long time go through different phases,” Mr Jassy said. “They are not in heavy people expansion mode every year.” BLOOMBERG, REUTERS

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