Amazon is set to become the latest tech giant to lay off significant numbers of employees, with up to 10,000 staff set to be let go this week. If confirmed the e-commerce giant’s workers will be the latest team to be affected by the wave of job cuts across the industry, with more than 45,000 Big Tech employees made redundant in the past few weeks.
Companies including Meta, Twitter, Salesforce, Lyft, Stripe, Microsoft, Tencent and Oracle have been letting staff go amid uncertain economic conditions, poor advertising performance and a bleak outlook for 2023.
First reported in the New York Times, the Amazon layoffs would amount to the biggest reduction for the company since it was founded, representing 3% of its corporate staff. Redundancies will be made across the business, but are set to primarily come from the devices division, human resources, and retail, the report says.
Amazon has predicted a slower-than-usual Christmas season, with CFO Brian Olsavsky telling investors during an earnings call in October that tighter household budgets were likely as people juggled high inflation and energy costs.
“The continuing impacts of broad-scale inflation, heightened fuel prices and rising energy costs have impacted our sales growth as consumers assess their purchasing power and organisations of all sizes evaluate their technology and advertising spend,” said Olsavsky.
Initially, the plan was to freeze hiring for several months but if the reports are accurate it looks like the headcount at the company will fall with redundancies on the cards, particularly among the teams making gadgets such as Alexa speakers and security cameras.
Amazon layoffs: hiring freeze and cutbacks
During the hiring freeze that started in October Amazon stopped filling 10,000 open roles in the retail business, then later moved to put a hold on recruitment across the entire company, including AWS, its highly profitable cloud computing division.
Amazon’s devices division, which includes the teams building new capabilities for digital assistant Alexa, has been making heavy losses in recent years according to the Wall Street Journal, so it is no surprise it’s said to be one of the areas at risk from the cuts.
Globally Amazon employs 1.5 million people, but most of these are hourly workers in its warehouses who won’t be affected by the layoffs. The corporate job losses are going to happen before Christmas, according to the New York Times report.
Amazon hasn't officially commented on the rumoured layoffs, which come off the back of a rapid expansion for the company during the pandemic. Its workforce doubled between 2020 and 2022 amid record profits as people were forced to work from home or stay indoors due to Covid-19, and thus relied heavily on delivery services and cloud-based digital systems.
Despite a slight rebound in the last quarter, Amazon has grown at the slowest rate in the past two decades since the end of the pandemic.
Some of the issues stem from a rapid expansion of warehouses, which has been scaled back. Other parts of the business have also been scaled back or cut including primary care division Amazon Care and Scout, the cooler-size home delivery robot.
Headcount at the company dropped by 80,000 between April and September but mainly through reducing its warehouse and hourly staff by not replacing them when they left, rather than making redundancies.
“When faced with an uncertain economy or some kind of discontinuous event, customers tend to double-down on companies that they believe have the best customer experience and that take care of them the best. And that is where our efforts remain focused,” Olsavsky told investors in October.
Big Tech layoffs come as overall tech sector grows
Despite dramatic mass layoffs at the Big Tech companies like Amazon, Twitter and Meta, there is still an overall technology skills shortage, with open roles available in non-tech and smaller companies.
In the past quarter alone the UK saw 92,000 technology jobs created, according to data from the Office of National Statistics. This is the second fastest growth in tech jobs for a decade.
Published as part of the ONS Labour Market Survey, the statistics suggest there are enough roles to fill the gap left by Big Tech layoffs.
Bev White, CEO of Nash Squared, owners of global technology recruiter, Harvey Nash told Tech Monitor: “UK Tech continues to buck this global trend by adding a further 92,000 jobs over the last quarter, and firmly cementing itself as the UK’s standout private sector job creator over the last three years – with almost 350,000 additional jobs created.
“This performance is even more startling when you consider that we’ve lost over three-quarters of a million private sector jobs over the same three-year period in the UK.”
White explained that despite the global downturn there is little sign of a tech slowdown in the UK, with investment expected to hit the third highest level for more than 15 years and digital leaders expecting tech budgets and headcounts to increase.