Amazon is not immune to the economic crisis. In the wake of Meta and other tech giants, Jeff Bezos’ group has announced the layoff of 18,000 employees. European employees are not spared.
Amazon has just announced a major reduction in its workforce. In a statement, Andy Jassy, CEO of the company, confirmed the removal of a “just over 18,000” jobs. The announcement comes hours after the Wall Street Journal revelations. The media had indeed published confidential information concerning Amazon’s budget restrictions.
Part of the layoffs will affect Europe. The majority of evictions are planned in Amazon stores and the human resources department. The firm has undertaken to warn employees who have been dismissed from January 18, 2023. At the same time, Amazon has increased the price of the Prime subscription to maximize its profits.
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Why Amazon is laying off 18,000 workers
The e-commerce giant had already mentioned the elimination of 10,000 jobs last November. A few months later, Amazon finally resolved to lay off nearly double its workers. It is biggest downsizing decreed by Amazon since its creation in 1994.
To justify this drastic measure, the replacement of Jeff Bezos blames ” an uncertain and difficult economy”. Without surprise, Amazon’s financial results contributed to these unprecedented budgetary restrictions. In the third quarter of last year, Amazon recorded a 48% drop in operating results in one year. For its part, the net result fell by 9%.
“The balance sheet this year has been more difficult given the uncertain economy and the fact that we have been hiring more quickly in recent years”explains Andy Jassy
This layoff plan follows the massive hirings made by Amazon during the health crisis. To respond to the explosion of online shopping, the Seattle company had indeed doubled the number of its employees. During the first months of confinement, Amazon even recruited more than 427,000 people.
At the end of last September, Amazon accumulated 1.54 million employees around the world, not to mention the countless seasonal workers recruited during the busiest periods of the year. In particular, the company is used to using day laborers for the end-of-year celebrations. In 2021, 12,000 seasonal workers came to lend a hand to group employees as Christmas approached.
A diminished desire for expansion
After the gargantuan recruitments of the Covid period, Amazon must revise its ambitions downwards. It’s not the only American giant to cut back. At the end of last year, Meta was forced to part with 13% of its workforce, or 11,000 individuals. Like Amazon, the group behind Facebook has hired with a vengeance during the pandemic. The company was also caught up in the economic crisis.
The situation is the same on the side of Twitter. Taken over with a firm hand by Elon Musk, the social network has fired half of its employees, causing concern from regulators and users. Jack Dorsey, founder of Twitter, believes he has ” increased the size of the company too quickly » by recruiting additional staff.
The slaughter does not stop there. The software publisher Salesforce will cut 10% of its workforce, or more than 7,000 employees, to save money. Like Amazon and Meta, Salesforce admits hiring too many employees during the Covid-19 crisis. The company’s workforce had increased by 30% in two years.
Amazon has planned to disclose its annual financial results as early as February 1, 2023. In view of the announced layoffs, we can expect half-mast gains. Reassuringly, the Amazon CEO says the job cuts will help the company ” seize long-term opportunities with stronger cost allocation”.