According to various media sources, the e-commerce behemoth Amazon will lay off hundreds of corporate employees as early as this week.
The New York Times and Wall Street Journal reported that Amazon is planning to lay off up to 10,000 white-collar employees, or 3% of its total staff. According to the Journal, the hardware sector, which includes the digital voice assistant Alexa, is likely to experience layoffs.
Amazon did not provide a response to a request for comment.
Brian Olsavsky, Amazon’s chief financial officer, told investors on an earnings call on October 27 that the company was “tightening its belt” by pausing hiring in certain businesses and discontinuing products and services where the company believes its resources are better allocated elsewhere.
After two years of pandemic-driven expansion, the online retailer faces a challenging customer environment. Amazon’s sales have slowed after doubling the size of its warehouses in the past year, and the company is looking to slow its expansion. Earlier this year, the company posted two consecutive quarterly losses before returning to profitability.
GlobalData analyst Neil Saunders said in a note, “It has lost market share in retail, has seen other parts of the business slow, and has suffered a very serious erosion in profitability.” “Given this context, it is unsurprising that Amazon desires to make the company more buoyant by shedding excess weight. It has previously eliminated some failing sections and is now seeking to reduce its workforce size through layoffs.”
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In recent months, Amazon has shut down a number of non-core business lines, including Fabric.com, the home delivery robot Scout, and Amazon Care, its in-home care service. The company froze corporate hiring two weeks ago, citing the “unusual macroeconomic environment.”
Amazon stock has lost 40 percent of its value since the beginning of the year, in line with the larger stock market decline.
The layoffs are also the most recent indication of a slowdown in the formerly rapidly expanding technology sector. The owner of Facebook and Instagram laid off 11,000 employees for the first time in the company’s history last week. Also affected by layoffs are Stripe, Twitter, and Lyft.
As part of new owner Elon Musk’s efforts to reduce costs at the troubled social media platform, Twitter recently laid off roughly 3,700 employees.