Amazon is planning to lay off thousands of employees and implement cost-cutting measures as the last few quarters haven’t been profitable, according to reports company could fire as many as 10,000 employees starting as this week. If the total number of layoffs stay around 10,000, it would be the biggest layoff in Amazons history. It would represent less than 1% of the workforce that employs over 1.6 million globally.
These job cuts will target the devices group, including the one responsible for Alexa voice assistant, along with the retail division and human resources. Amazon has cautioned employees in some unprofitable units to look for other opportunities within the company.
The world’s largest online retailer has spent much of this year adjusting to a sharp slowdown in e-commerce growth as shoppers resumed pre-pandemic habits. Amazon delayed warehouse openings and froze hiring in the retail group. Amazon Chief Executive Officer Andy Jassy has vowed 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 must-have gadgets and often wind up in consumers’ closets.
Amazon reported disappointing third-quarter earnings in October that spooked investors and caused shares to sink more than 13%. It marked the first time Amazon’s market cap fell below $1 trillion since April 2020, and the report was the second time this year that Amazon’s results have been enough to spark a double-digit percentage sell-off. The sell-off continued for days after the report and erased almost all of the stock’s pandemic surge. Amazon stock is down about 41% for the year, more than the 14% drop in the S&P 500, and is on pace for its worst year since 2008.
