Amazon.com, Inc. plans to lay off 10,000 people next week. This will be the biggest layoff in the company’s history and the latest mass firing by a technology company.
People close to the situation told the New York Times that most of the cuts would be made in the devices division, which makes Amazon’s Alexa, as well as in the retail division and human resources.
If all 10,000 jobs are cut, that would be less than 1% of Amazon’s global workforce and 3% of its corporate workforce.
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Layoffs in Tech
Big tech companies have fired many people because they think a recession is coming soon.
In October, Elon Musk fired half of the staff at Twitter Inc., and last week, Meta Inc., which owns Facebook, said it would fire 11,000 employees or 13% of its total staff.
There have also been a lot of layoffs at online retailers like Amazon. In 2022, GoPuff, a company that delivered consumer goods and food, let go of 2,300 workers in four separate rounds.
In the last few months, Lyft, Inc., Stripe, Inc., Peloton Interactive, Inc., and other big tech companies have all laid off many people.
Many companies hired too many people during the pandemic when e-commerce and social media companies saw colossal growth. Microsoft, Meta, and Alphabet, the parent company of Google, all added up to 20% more employees in the 12 months leading up to September 30.
Amazon’s Decline
The pandemic was also a time when Amazon grew. Not only did the company make more money than ever before, but from the beginning of 2020 to the end of 2021, Amazon hired twice as many people.
The company hasn’t done as well in the last year as it did in the first year of the pandemic. In the past year, the market value of the top five technology companies by revenue has dropped by almost $4 trillion. On Wednesday, Amazon was the first company to lose $1 trillion in market value.
Since becoming CEO last year, Andy Jassy at Amazon has been trying to scale back the company and save money. One area he looked specifically into was the device unit that produces Alexa. Internal documents show that it has been operating at a loss of more than $5 billion per year in recent years.