Amazon.com Inc is laying off more than 18,000 employees — the biggest corporate workforce reduction in company history — in the latest sign that a tech industry slump is deepening.
Amazon CEO Andy Jassy on Wednesday announced the move in a memo to staff, saying it followed the company’s annual planning process.
The cuts, which began last year, were previously expected to affect about 10,000 people. The reduction is concentrated in the company’s corporate ranks, mostly Amazon’s retail division and human resources functions such as recruiting.
Photo: Bloomberg
“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.”
Even though the prospect of layoffs has loomed over Amazon for months — the company has said that it hired too many people during the COVID-19 pandemic — the increasing total suggests that the company’s outlook has darkened.
Amazon joins other tech giants in making major cuts.
Earlier on Wednesday, Salesforce Inc announced plans to lay off about 10 percent of its workforce and reduce its real-estate holdings, after the enterprise software company said it hired too many people during a pandemic-fueled boom and is adjusting to more cautious spending by customers.
The workforce moves should be completed by the end of fiscal year 2024, Salesforce, which has about 80,000 employees, said in a regulatory filing.
Amazon’s plan to lay off 18,000 workers would be the biggest cut yet for tech firms during the current slowdown, but the e-commerce giant also has a far bigger workforce than its Silicon Valley peers. It had more than 1.5 million employees as of the end of September last year, meaning the latest cuts would represent about 1 percent of the workforce.
At the time the company was planning its cuts in November, a spokesperson said that Amazon had about 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 staff and then began making cuts.
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 Seattle-based company also is trying to align excess capacity with cooling demand.
One effort includes trying to sell excess space on its cargo planes, people familiar with the matter said.
Amazon is seeing parts of its business level off, but it continues to invest in its cloud-computing and advertising businesses, as well as video streaming.
In Wednesday’s memo, Jassy said the company would provide severance, transitional health benefits and job placement to affected workers.
He also chided an employee for leaking the news, an apparent reference to a Wall Street Journal report.
The company plans to begin discussing the moves with affected employees on Jan. 18, he said.
“Companies that last a long time go through different phases,” Jassy said. “They’re not in heavy people expansion mode every year.”
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