By HALELUYA HADERO
NEW YORK (AP) — Amazon has begun mass layoffs across its corporate ranks, becoming the latest tech company to cut staff amid growing fears about the broader economic environment.
On Tuesday, the company informed regional authorities in California that it would lay off about 260 workers at various facilities that employ data scientists, software engineers and other company workers. These job cuts would be effective from January 17.
Amazon would not specify how many additional layoffs may be in the works beyond those confirmed by California’s Worker Adjustment and Retraining Act, also known as WARN, which requires companies to provide 60 days notice. days if they have 75 or more full-time or part-time workers. Amazon employs more than 1.5 million workers worldwide, mostly hourly workers.
The online retail giant, like other tech and social media giants, has made huge profits during the COVID-19 pandemic as home shoppers purchased more items online. But revenue growth has slowed as the worst of the pandemic subsided and consumers relied less on e-commerce.
The Seattle-based company has posted two consecutive losses this year, mainly due to the depreciation of the value of its equity investment in electric vehicle start-up Rivian Automotive. The company returned to profitability in the third quarter, but investors were glum about its weaker-than-expected revenue and lackluster projections for the current quarter, which is generally good for retailers due to the season. holiday shopping.
In an effort to cut costs, Amazon has already scrapped some of its projects, including its fabric.com subsidiary, Amazon Care and the cooler-sized home delivery robot Scout. It has also reduced its physical footprint by delaying — or canceling — plans to occupy new warehouses across the country. And Amazon chief financial officer Brian Olsavsky said the company was preparing for what could be a period of slower growth and would be careful about hiring in the near future.
Mass layoffs are rare at Amazon, but the company saw rounds of job cuts in 2018 and 2001 during the dot-com crash. On the warehouse side, the e-commerce giant typically downsizes through attrition.
Faced with high costs, the company announced earlier this month that it would suspend hiring of its workforce, adding to the freeze it had put a few weeks earlier on its retail division. But the layoffs were not far off. Employees who work in different units, including voice assistant Alexa and cloud gaming platform Amazon Luna, said they were laid off on Tuesday, according to LinkedIn posts. Some of them were based in Seattle, where the company is headquartered.
“As part of our annual operational planning review process, we always review each of our businesses and what we think needs to change,” Amazon spokesperson Kelly Nantel said in a statement. -economic environment (as well as several years of rapid hiring), some teams are making adjustments, which sometimes makes certain roles unnecessary.
In a memo to the Devices and Services team that Amazon shared on its website, the team’s senior vice president, David Limp, said the company was consolidating certain teams and programs. He said those made redundant in the process were notified on Tuesday and the company would work with them to “provide support”, including assistance in finding new roles. If an employee can’t find a new position with the company, Limp said Amazon will provide severance pay, external job placement assistance and what he called transitional benefits.
The retail giant follows other tech giants that have cut jobs in recent weeks – a reversal from earlier this year when tech workers were in high demand. Facebook parent company Meta said last week it would lay off 11,000 people, or about 13% of its workforce. And Elon Musk, Twitter’s new CEO, cut the company’s workforce in half this month.
Going forward, Wedbush Securities analyst Daniel Ives said he thinks Amazon is likely to maintain its workforce and investments in profitable areas such as cloud computing unit AWS, while by reducing costs in non-strategic areas like Alexa and other lunar projects.
“The clock has struck midnight in terms of hyper-growth for Big Tech,” Ives said. “These companies were hiring at such a high rate, it wasn’t sustainable. Now there are painful steps to take.