Amazon cuts more than 18,000 jobs in escalating cuts

(Bloomberg) — Inc. is laying off more than 18,000 employees — a significantly larger number than previously planned — in the latest sign that the tech slump is deepening.

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CEO Andy Jassy announced the move in a memo to employees on Wednesday, saying it follows the company’s annual planning process. The cuts, which began last year, were previously expected to affect about 10,000 people. The cuts focus on the corporate levels of the company, primarily Amazon’s retail division, and HR functions like recruiting.

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

While the possibility of layoffs has been looming over Amazon for months – the company has admitted it has hired too many people during the pandemic – the growing totals suggest the company’s prospects have turned black. dark. It joins other tech giants to make big cuts. Earlier on Wednesday, Salesforce Inc. announced plans to eliminate about 10% of its workforce and reduce its real estate holdings.

Amazon investors have given a positive response to the latest austerity efforts, betting it could boost the e-commerce company’s bottom line. Shares were up nearly 2% in late trading after the Wall Street Journal first reported on the plan.

Eliminating 18,000 workers would be the biggest cut for tech companies during the current downturn, but Amazon also has a much larger workforce than its Silicon Valley peers. It has more than 1.5 million employees as of the end of September, meaning the latest cuts will account for about 1% of its workforce.

At the time the company was planning the cuts in November, a spokeswoman said Amazon had about 350,000 employees worldwide.

The world’s largest online retailer spent time late last year adjusting to a steep drop in e-commerce growth as shoppers returned to pre-pandemic habits. Amazon delayed warehouse openings and halted hiring in its retail team. It extended the freeze to corporate employees and then began cutting.

Jassy has eliminated or cut back on experimental and unprofitable businesses, including teams working on telehealth, delivery robots, and video-calling devices for children, with other projects.

The Seattle-based company is also trying to match excess capacity with cooling demand. According to people familiar with the matter, one effort includes trying to sell excess space on its cargo planes.

Amazon, which started out as an online bookstore, is seeing part of its business falter. But it continues to invest in its advertising and cloud computing and video streaming businesses.

The first wave of cuts hit Amazon’s Devices and Services group the hardest, which builds Alexa digital assistants and Echo smart speakers, among other products. The head of the team told Bloomberg last month that layoffs in the unit total less than 2,000 people and that Amazon remains committed to the voice assistant.

Several employers and employees in the company’s human resources team have been offered acquisitions. Jassy told employees in November that there will be more cuts in 2023 at its retail and HR teams.

In Wednesday’s memo, Jassy said the company will provide severance pay, transitional health benefits and job placement to affected workers. He also reprimanded an employee for leaking the news, apparently alluding to the Wall Street Journal report. He said the company plans to begin discussing the moves with affected employees on January 18.

“Long-term companies go through different phases,” says Jassy. “They’re not in annual heavyweight expansion mode.”

(Further update from memo in paragraph 13.)

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