Mounting losses prompt Amazon's plan for a workforce reduction of 10,000, according to news reports.
In a move that signals a shift in the tech industry, Amazon has announced plans to lay off hundreds of staff members, potentially affecting up to 10,000 employees. If these layoffs materialise, they would mark the largest in the company's history.
The job cuts will primarily target the devices group, including the Alexa voice assistant, the retail department, and human resources. This decision comes as Amazon adjusts to a sharp slowdown in ecommerce growth this year.
The Alexa division, in particular, has been prone to scaling down due to voice-activated devices not becoming must-have gadgets, according to reports from The New York Times. The Times also reported that Amazon's growth 'snapped' after the pandemic bullwhip, reducing to the lowest in two decades, following a rapid increase during the COVID-19 pandemic years.
Amazon President Andy Jassy has vowed to improve procedures amidst reducing sales growth and economic uncertainty. He emphasised the need for the company to adapt to the current economic climate, which has seen a slowdown in consumer spending due to rising prices.
Amazon is not alone in this move. Facebook's parent firm, Meta, recently fired 11,000 staff members, while Twitter recently cut approximately 50% of its workforce following its sale to Elon Musk. These companies, like Amazon, are preparing for a possible financial recession.
The delay in storehouse openings and hiring freezes in the retail group further underscore Amazon's efforts to streamline its operations. The company is aiming to navigate the challenging economic conditions while maintaining its position as a leader in the ecommerce sector.
The layoffs come after Amazon warned of a slowdown in growth for the holiday season, a period traditionally marked by increased sales. The company attributed this slowdown to customers and organisations having less money to spend due to rising prices.
As Amazon moves forward, it will be interesting to see how the company adapts to these changes and what implications they may have for the wider tech industry.
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