As the global economic outlook continues to deteriorate, Amazon says it will lay off more than 18,000 employees.
A memo from CEO Andy Jassy that was distributed to employees indicates that a number of teams will be impacted, including Amazon Stores and the department of human resources.
“Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” he said.
In November, Jassy stated that the e-commerce giant would keep cutting jobs into early 2023. In the fall, a number of media outlets reported that Amazon planned to lay off approximately 10,000 employees.
As the pandemic shifted consumer preferences toward e-commerce, Amazon and other tech companies significantly increased hiring over the past few years.
Now, as people return to their pre-pandemic routines and macroeconomic conditions deteriorate, many of these seemingly untouchable tech companies are experiencing whiplash and laying off thousands of employees.
According to Jassy’s memo, Amazon’s executives met recently to figure out how to cut costs and put “what matters most to customers and the long-term health of our businesses” first.
“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” he added.
Jassy stated that Amazon will be able to pursue long-term opportunities with a stronger cost structure thanks to the layoffs. However, he referred to the reductions as a “difficult decision” and stated that he is “deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted.”
He added that the company will begin informing affected employees on January 18.
During the pandemic, consumers relied on online shopping for almost everything, which led to the initial boom in Amazon’s business.
However, the company is facing a return to in-person shopping this year as well as rising inflation, which has significantly decreased consumer demand.
With a holiday season forecast that woefully missed analysts’ expectations in October, Amazon disappointed Wall Street. Last year, the stock of the company fell by about 50%.
A number of other tech founders and CEOs, like Jassy, have since admitted that they did not accurately gauge the demand for the pandemic.
Meta, the parent company of Facebook, recently announced 11,000 layoffs, the most ever for the company. After Elon Musk purchased Twitter for $44 billion, the company also made numerous announcements regarding layoffs.
Salesforce announced this week that 10% of its employees would be laid off.