Amazon begins mass layoffs in corporate ranks; data scientists, software engineers bear the brunt
Amazon begins layoffs: Amid rising concerns over the wider economic environment, Amazon has started mass layoffs in its corporate ranks. It also followed Twitter and Meta's suits, becoming the latest tech company to trim its workforce.
The company's notification to regional authorities in California stated that it would lay off around 260 employees at various facilities, including data scientists, software engineers and other corporate workers. It further added that these layoffs would take effect from January 17.
Meanwhile, the tech company declined to state how many additional layoffs may be planned beyond the ones confirmed by California's Worker Adjustment and Retraining Notification Act (WARN), which mandates that employers give 60 days' notice if they have 75 or more full-time or part-time employees. More than 1.5 million (15 lakh) employees, mostly hourly workers, are employed by Amazon worldwide.
The company witnessed slow revenue growth post COVID
Similar to other internet and social media behemoths, the online retail giant saw significant revenues during the COVID-19 pandemic as homebound buyers increased their online shopping. But when the pandemic subsided and customers turned less and less to online shopping, the company witnessed slow revenue growth.
The Seattle-based business posted two losses in a row this year, primarily due to write-downs of the value of its stock investment in Rivian Automotive, a start-up producing electric vehicles.
Investors were unhappy with the company's weaker-than-expected revenue and bleak forecasts for the current quarter, despite the fact that merchants normally do well during the holiday shopping season. Meanwhile, the company returned to profitability during the third quarter.
Amazon drops several of its projects
Amazon has already begun discontinuing some of its projects in an effort to reduce expenses, like subsidiary cloth.com, Amazon Care, and the cooler-size home delivery robot Scout.
Additionally, it has been reducing its physical footprint by postponing or scrapping plans to occupy several new warehouses across the nation.
Furthermore, according to Amazon CFO Brian Olsavsky, the company is preparing for what may be a period of slower development and will exercise caution while making new recruitments in the near future.
Mass layoffs are rare at Amazon, but the company has had rounds of job cuts in 2018 and in 2001 during the dot-com crash. On the warehouse side, the e-commerce giant typically trims its workforce through attrition.
Faced with high costs, the company announced earlier this month it would pause hiring among its corporate workforce, adding to the freeze it put a few weeks earlier on its retail division. But the layoffs were not far off.
Employees who work in different units, including voice assistant Alexa and cloud gaming platform Amazon Luna, said they were let go on Tuesday, according to LinkedIn posts. Some of them were based in Seattle, where the company has its headquarters.
"As part of our annual operating planning review process, we always look at each of our businesses and what we believe we should change," Amazon spokesperson Kelly Nantel said in a statement. "As we have gone through this, given the current macro-economic environment (as well as several years of rapid hiring), some teams are making adjustments, which in some cases means certain roles are no longer necessary. "
In a statement posted on the company's website, Dave Limp, senior vice president of devices and services, said Amazon was consolidating some teams and programmes.
Amazon vows to 'provide support' to axed employees
He said those laid off in the process were notified on Tuesday and the company will work with them to "provide support", including assistance in finding new roles.
If an employee cannot find a new role within the company, Limp said Amazon will provide a severance payment, external job placement support and what he called transitional benefits.
The retail behemoth follows other tech giants who have cut jobs in the past few weeks. Among them, Facebook parent Meta said last week it would lay off 11,000 people, about 13% of its workforce. And Elon Musk, the new Twitter CEO, slashed the company's workforce in half this month.
(With inputs from AP)
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