Amazon will lay off 3% of its staff, amounting to around 10,000 people

The past few years have been hard on everyone, from individual people to small and mid-sized companies and, apparently, even major corporations such as Amazon. In fact, according to a source familiar with the company, Amazon intends to go through its largest workforce reduction yet, laying off 10,000 people, or around 3% of its total workforce. The unnamed source claimed that the reduction comes due to the uncertain macroeconomic environment and that Amazon is far from being the only company that faces it.

The source said that the company would make its move soon, likely in the first half of this week, although the exact number of employees that will be laid off may be different from the reported one. The reason for this is the fact that businesses within Amazon are reviewing their priorities.

The idea, according to what is known, is to eliminate a number of jobs in Amazon’s devices organization. This is the part of the company that manufactures products such as home security cameras, voice-controlled “Alexa” gadgets, and alike. Apart from that, the company will also reduce the number of workers in its retail and HR divisions. While the claims say that the firm will start the process this week, it is unclear whether the staff will be informed simultaneously at some point or during a specific period of time.

The struggles continue as the economic situation deteriorates

Despite the general success of businesses in the tech industry, the formerly mentioned uncertainties and challenges in the macroeconomic environment hit a lot of businesses, not just Amazon. In fact, there was a wave of layoffs across the tech sector even before the information about Amazon’s incoming layoffs emerged.

The tech industry was booming for years, which led to rapid hiring and expansion of the businesses. Now that the situation is turning, the sector is wary of recession, but it doesn’t seem like there is much choice in the matter. Last week, for example, Meta Platforms (formerly Facebook) announced that it would have to cut around 13% of its workforce, which is approximately 11,000 jobs.

While the holiday season is approaching rapidly, Amazon said that it expects a noticeable slowdown in sales. Its CFO Brian Olsavsky recently said on record that the company has noticed signs of tighter household budgets, which makes customers less inclined to shop. Furthermore, the users themselves are continuing to struggle with growing inflation and higher energy costs, just like the company itself.

Given the situation, Amazon has decided to freeze incremental corporate hiring for an unspecified number of months. As for why the company chose to lay off employees from its devices unit, the reason is that the unit saw an annual operating loss of more than $5 billion in the past several years. With most customers using Alexa for just a handful of tasks, there is no point in producing new capabilities for the voice assistant.

Amazon shares have felt the hit of the current global economic situation as well, dropping by over 40% throughout 2022.