Amazon plans to lay off thousands of employees and implement cost-cutting measures because the past few quarters have been unprofitable, according to reports. The company could fire up to 10,000 employees starting this week, according to reports The New York Times.
If the total number of layoffs remains around 10,000, it will be the largest layoff in Amazon history. It would represent less than 1 percent of the workforce in a company that employs more than 1.6 million globally.
The New York Times reported, citing anonymous sources, that the job cuts will target the hardware group, including the group responsible for the Alexa voice assistant, along with the retail and human resources divisions.
Amazon, after a months-long review, warned employees in some unprofitable units to look for other opportunities within the company, The Wall Street Journal reported.
The report comes just weeks after the e-commerce giant warned of slowing growth in the busy holiday season, a period when it was generating peak sales. Amazon said this is because consumers and businesses have less money to spend because of higher prices.
The world’s largest online retailer has spent most of this year adjusting to a sharp slowdown in e-commerce growth as shoppers resumed pre-pandemic habits. Amazon postponed 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 subject to downsizing because the group’s voice-activated devices have not yet become must-haves and often end up in consumers’ cupboards.
After experiencing “the most profitable era ever” during the COVID-19 pandemic years, which saw explosive growth in online consumer spending, “Amazon’s growth has slowed to the lowest rate in two decades, as the pandemic has cut short.” The report said.
Amazon is the latest Technology company to make deep cuts To its employee base to prepare for a potential economic downturn.
Last week, Twitter cut nearly 50% of its workforce after it was sold to Elon Musk. Facebook’s parent company Meta also laid off 11,000 employees.
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