Amazon plans to lay off thousands of employees and implement cost-cutting measures as recent quarters have not been profitable, according to reports. The company could lay off up to 10,000 employees as early as this week, reports The New York Times.
If the total number of layoffs remains around 10,000, it would be the biggest layoff in Amazon’s history. This would represent less than 1% of the workforce of a company that employs more than 1.6 million people worldwide.
The job cuts will target the devices group, including the one responsible for voice assistant Alexa, as well as the retail division and human resources, the NYT reported citing unnamed sources.
Amazon, after a months-long review, warned employees in some unprofitable units to seek other opportunities within the company, The Wall Street Journal reported.
The report comes just weeks after the e-commerce giant warned of slower growth for the busy holiday season, a time when it generated the highest sales. Amazon said it was because consumers and businesses had less money to spend due to higher prices.
The world’s largest online retailer has spent much of this year adjusting to a marked slowdown in e-commerce growth as shoppers return to pre-pandemic habits. Amazon delayed warehouse openings and froze hiring in the retail group.
Amazon CEO Andy Jassy has pledged to streamline operations amid slowing sales growth and economic uncertainty.
The Alexa division has long been vulnerable to downsizing because the group’s voice-activated devices have yet to become staple gadgets and often find their way into consumer closets.
After experiencing its “most profitable era on record” during the years of the COVID-19 pandemic, which saw exponential growth in online consumer spending, “Amazon’s growth has slowed to the lowest rate in two decades as the whiplash of the pandemic shattered,” the NYT said in the report.
Amazon is the latest tech company to make deep cuts to its employee base to prepare for a potential economic downturn.
Last week, Twitter cut around 50% of its workforce following its sale to Elon Musk. Facebook’s parent company, Meta, also laid off 11,000 employees.
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