CEO Andy Jassy stated that Amazon plans to lay off more than 18,000 employees to reduce costs in an uncertain economy. He added that the company hired rapidly during the pandemic, and such a large workforce is not necessarily beneficial at uncertain times. Amazon doubled its global workforce between 2020 and 2022 by hiring to meet an explosion in demand for deliveries.
The sudden announcement resulted from an employee leaking the information externally. It would not have been revealed until as late as January 18, when the employees to be laid off would have been informed.
The company’s management, according to Jassey, is ” deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly.” Jassy also briefed that Amazon will support those who are adversely affected by extending severance packages, including transitional health benefits and succeeding job placement aid.
As per Amazon, the layoff is a call for intervention because the company incurred a lot of expenditure across various verticals. The same company has also reached out for a US$8b term loan from certain vendors (undisclosed) to support corporate purposes.
Moreover, the online retailer is anticipating much slower growth as inflation is soaring. Many other companies, like Alphabet, Kraken, Salesforce, Hewlett Packard, and Meta, are also laying off employees to cut costs.