The year started badly for Amazon, and especially for its employees. The company created by Jeff Bezos and managed by Andy Jassy plans to part with part of its staff. On Wednesday, an article published in the wall street journal announced that 17,000 jobs were at risk. But Amazon confirmed a little later on Wednesday that it intended to cut “just over 18,000 jobs”, including in Europe.
This job cut plan is the most important among the recent announcements of workforce reductions affecting the new technologies sector in the United States. It is also the most massive staff reduction in the Seattle company’s history. The daily, which cites sources close to the distribution giant, recalls that Amazon had already announced in November the plan to cut 10,000 jobs and started to do so. Information which has however never been confirmed by the group, underlines Amazon France.
Strong hiring during the Covid
At the end of September, the group had 1.54 million employees worldwide, not including seasonal workers recruited during periods of increased activity, particularly during the holiday season. A large payroll inherited from the boom years of 2020 and 2021 for Amazon, which delivered its customers confined or restricted by health measures. The group, valued at 868 billion dollars on the stock market, then hired with a vengeance during the pandemic to meet the explosion in demand, thus doubling its global staff between the beginning of 2020 and the beginning of 2022.
But the company saw its net profit drop 9% year on year in the third quarter. And for the last quarter, Amazon anticipated anemic growth by its standards, between 2% and 8% over one year, and an operating profit of between 0 and 4 billion dollars, against 3.5 for the same period of 2021. The group will announce its annual results on February 1. Results worse than expected and which should disappoint investors, which caused the stock to fall 48% over one year after a significant bullish rally during the Covid crisis. Thus, the title went from 89 dollars on November 1, 2019 to 186 dollars on July 9, 2021 before falling to 85 dollars this Thursday, January 5, 2022.
Investors seem to have appreciated the news of the group’s downsizing since last night, Amazon’s share price after the close of trading rose 1.70%.
Serial layoffs in American tech
In the tech sector, the major platforms with an advertising-based business model are facing budget cuts from advertisers, who are reducing their expenses in the face of inflation and rising interest rates and the collapse of their course last year. The Nasdaq, the American index of technology companies fell from 15,200 points on January 6, 2022 to 10,458 points on Thursday, falling by 31%.
A bad year that sounds like crossing the desert for tech. Meta, the parent company of Facebook, announced in November the loss of 11,000 jobs, or about 13% of its workforce. Twitter, bought in October by Elon Musk, for its part fired about half of its 7,500 employees. Earlier, at the end of August, Snapchat also cut around 20% of its workforce, or more than 1,200 employees. And the latest, the American IT group Salesforce, specializing in management solutions and in the cloud (remote computing), announced on Wednesday that it was laying off around 10% of its employees, or just under 8,000 jobs. In total, nearly 153,000 employees of American technology companies have lost their jobs.
In France, it is Back market that rings the period of downsizing in tech
In France, too, the first social plans are emerging in tech, such as Back Market, which is currently implementing a voluntary departure plan to reduce its workforce by 13%, out of a total workforce worldwide of 715 employees. The spokesperson interviewed asserts that the company “goes well”. But the startup, which still does not generate profits, must reduce its costs and advance its profitability objectives in a more tense economic and financial context with the rise in borrowing costs after ten years of low rates.
The ecosystem of France, more protective by its social law and very dependent on the public bank Bpifrance, does not undergo a similar wave of layoffs. For the moment. But the cloud of tech social plans is also beginning to be visible in the French sky with the first announcements of Back Market or Meero, a specialist in internet photography, which is currently cutting 72 jobs.