Amazon plans to lay off about 10,000 workers

Amazon plans to lay off about 10,000 workers, according to information of New York Times Posted this Monday. The layoffs, which could come as soon as this week, will hit the division dedicated to the manufacture of gadgets, such as Alexa voice assistant, as well as in the sales and human resources departments. It’s the largest downsizing in the company’s history, founded outside Seattle in 1994.

The figure represents 3% of Amazon’s permanent workers and 1% of the total workforce, which adds up to 1.5 million employees spread throughout the world, most of them a workforce temporarily hired in warehouses or dedicated to logistical tasks. The adjustment comes at one of Amazon’s critical workload moments, with the gift season – which begins in the United States with Thanksgiving, continues with the consumer avalanche of Black Friday offers and ends at Christmas – at the gates. . This year’s shopping spree looks bleaker than usual, due to inflation and grim omens for the world economy.

Amazon is the latest tech company to announce mass layoffs, after Meta (Facebook), which last week confirmed its plans to get rid of 11,000 of its employees (13%) and Twitter. After buying him for 44,000 million dollars, Elon Musk left half of the social network’s staff on the street after a few days, some 3,700 people in total.

The pandemic, key to layoffs

The reasons for the latest round of layoffs are to be found in the pandemic. The confinements decreed around the world after the appearance of the coronavirus in early 2020 caused an unprecedented increase in electronic commerce, and, as a consequence, the most profitable year in its history for Amazon, which doubled its workforce (it went from 798,000 employees to end of 2019 to 1.6 million on December 31, 2021) and increased investment in new developments.

The customs acquired during this exceptional time did not prove to be as lasting as analysts had predicted. As of early 2022, the company’s growth was at the lowest rate in two decades. The company had to pay for the excesses of the past, and faced the high costs of overinvestment and overly optimistic expansion. That perfect storm caused revenue to plummet in the third quarter of the year. Also, that the capitalization of the company fell for the first time since April 2020 below one billion dollars. Amazon shares have plummeted 41% so far this year and are on track for their worst year since 2008.

The layoffs come at a dire time for the technology sector, which has experienced an unprecedented hiring rush that has left behind a season of savage downsizing.

To the employees who Twitter and Meta they sent to the unemployment line, we must add those of the Snap social network, which announced in August the dismissal of 20% of its workforce, more than 1,000 workers, as well as those of Peloton (4,000 employees in October), Netflix (500), Lyft, a rival to Uber (700) or the e-commerce payment platform Stripe (about 1,000). Microsoft and Intel are carrying out, for their part, job cuts of hundreds of workers. Apple and Alphabet (Google) are also trying to contain their personnel costs by first reducing the pace of hiring.

The news of Amazon’s job plans came on the same day that CNN published an interview with its founder, Jeff Bezos, announcing his intention to donate “the majority” of his $124 billion net worth to charity during his lifetime (120,000 million euros). Bezos is right now, according to the fickle ranking Bloomberg, the fourth richest man in the world. The list is headed by Elon Musk.