Amazon plans to lay off ten thousand employees in corporate and technology jobs amid cost-cutting review and a “worsening macroeconomic environment”, as inflation in the United States is at a 40 year record high.
The online retailer giant plans to eliminate jobs beginning this week with staff working at its human-resources and retail divisions which represent 3% of Amazon’s corporate staff.
Beth Galetti, Amazon’s senior vice president of people experience and technology announced earlier this month the company has hired a freeze on corporate jobs. She wrote, “We’re facing an unusual macro-economic environment, and want to balance our hiring and investments with being thoughtful about this economy.”
Amazon’s planned retrenchment during the critical holiday shopping season shows how quickly the souring global economy has put pressure on it to trim businesses that have been overstaffed or underdelivering for years.
Last week, The Wall Street Journal reported an annual operation loss of more than $5 billion in Amazon’s device unit in recent years. The company has decided to stop investing on new capabilities for Alexa as the voice assistant is only used for a fixed number of tasks.
Shares of Amazon have lost more than 40% of their value this year.
Amazon had doubled its work force in two years during The COVID crisis, which produced the company’s most profitable era on record, as consumers flocked to online shopping and companies to its cloud computing services.
But, Amazon’s growth slowed earlier this year to the lowest rate in two decades. The company faced high costs from decisions to overinvest and rapidly expand, while high inflation dented sales.
A projected downturn for the US economy has forced tech giants to significantly slow their pace of hiring or freeze it altogether. Last week, Meta announced it would cut 11 thousand employees whereas Twitter laid off thousands of employees in departments across the company.