Amazon Cuts More Workers Than Expected

Ecommerce giant Amazon has announced that its projected layoffs will impact a total of approximately 18,000 workers.

Tech Companies Lay Off Thousands of Workers

In November, The Wall Street Journal reported that, according to an individual familiar with the matter, Amazon's would cut around 10,000 employees, or approximately 3% of its corporate workforce, as part of an effort to control costs. On Wednesday, per a memo from CEO Andy Jassy, the ecommerce company announced the actual number of job cuts would be 8,000 higher expected.

This round of layoffs represent just 1.2% of Amazon's overall workforce. However, Amazon now has the highest number of layoffs since the onset of COVID-19, according to Layoffs.fyi.

Amazon hasn't been the only major technology company laying off thousands of workers lately. Toward the end of last year, companies like Meta and Twitter announced massive layoffs. And on Wednesday, Salesforce also added to this trend by reporting it would be eliminating 10% of its workforce.

In the memo, Jassy, like many other tech company executives, cited economic uncertainty as one of the main reasons for cutting staff. He also pointed to the rapid workforce expansion in the last few years and wrote that Amazon is now in a different phase of its development.

Which Areas of Amazon Are Most Impacted by Layoffs?

While Jassy noted the layoffs would span multiple teams, he said the majority of eliminations will be in the People, Experience, and Technology (PXT) and Amazon Stores divisions. According to The Wall Street Journal, the impacted employees are mostly concentrated in the ecommerce company's corporate ranks, representing about 5% of that part of its workforce.

"S-team and I are deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted," Jassy wrote. "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."

In November, Amazon decided to let go of a number of employees in its Devices and Books business, in addition to issuing voluntary reduction offers for some employees the PXT division.

Are More Layoffs Coming?

While much has been made of tech sector layoffs, this isn't the only area that's executed major job cuts. Real estate firms and prominent banks also posted some of the biggest layoffs of 2022.

With concerns about the state of the economy on the rise, more layoffs may be on the way. Despite this, private employment surged more than expected in December 2022, with ADP reporting that 235,000 jobs had been added to the United States economy.

However, the ADP report indicates that small and medium-sized businesses saw a resurgence in hiring, particularly in the service sectors, while large businesses saw a drop of 150,000 jobs. As a result, there are concerns that major companies will continue eliminating workers as they reposition for a potential recession.