Amazon Feels the Heat As It Plans to Lay Off 18,000 Workers

The global economic decline has affected almost every company in some way or another, including giants like Microsoft, Google, Apple, and even Amazon. Now, the world’s largest online retailer is facing pressure, which is forcing it to lay off 18,000 workers as economic conditions continue to worsen.

The largest jobs cut since downsizing began: Amazon’s decision to cut over 18,000 jobs marks the largest jobs cut since the downsizing began in 2022. The number of cuts was originally meant to be around 10,000 in November, but it has since changed, with CEO Andy Jassy saying the number they needed to cut was “just over 18,000.”

• The large number is only a small percentage of the 1.5 million people employed by the massive company.
• Amazon also began rescinding job offers when it first started to consider laying off employees last year.

The cause of the layoffs, aside from the obvious decline in the economy, is a story heard multiple times since the pandemic — overhiring.

Many companies expanded during the pandemic, and Amazon was no exception. The massive increase in online sales and the need for cloud storage saw Amazon hiring like crazy, adding hundreds of thousands of employees in the past few years. The current need for downsizing is a result of that, at least to some degree.

Who will be affected? The layoffs will not impact the entire company. Instead, the cuts will primarily target the corporate workforce, leaving the hourly warehouse workforce untouched. According to a memo sent out by Jassy, the main teams affected will include the human resources department and Amazon Stores.

• The 18,000 workers represent around 5% of the company’s corporate workforce.
• The goal set by Amazon executives was to prioritize “what matters most to customers and the long-term health of our businesses.”

However, the full extent of the cuts is yet to be seen, with the layoffs likely to extend into teams beyond the ones mentioned above. Those impacted by the layoffs are expected to receive notification from January 18th.

Jassy tried to reassure employees: Upon the announcement of the massive layoffs, Jassy wrote, “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so.”

Jassy also said, “We don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted.”

To that end, Amazon intends to help soften the blow, offering to help employees. He said, “We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support.”

Salesforce announced its own layoffs the same day: Salesforce plans to eliminate 10% of its workforce, which means laying off around 8,000 people. The same reasoning applied to Salesforce’s decision as it did to Amazon’s, with the company mentioning overhiring and the need to cut costs.

“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing,” Salesforce Co-CEO Marc Benioff told employees.

Amazon and Salesforce are only the latest to lay off a large number of employees. Another example is Meta, which announced the layoff of 11,000 job cuts in 2022. While it would be nice to say the worst of it is in the past, the layoffs are only expected to continue through 2023.