Amazon.com Inc announced on Monday that it would be cutting 9,000 jobs, adding to a recent wave of layoffs that has hit the technology sector as the uncertain economy forces companies to reduce costs. The latest job cuts bring the total number of positions eliminated by Amazon to 27,000, which is equivalent to 9% of its corporate workforce of roughly 300,000 people.
The layoffs will mainly affect Amazon’s highly profitable cloud and advertising divisions, as businesses have started scrutinizing their spending in light of economic concerns. Even Amazon’s streaming unit, Twitch, will lay off more than 400 employees, according to its CEO Dan Clancy. The job cuts are expected to be finalized by April.
This decision is a significant shift for Amazon, a company that has always been proud of its job creation record. However, the current economic climate and ongoing analysis of priorities have led to the need for cost reduction measures. Amazon’s CEO, Andy Jassy, stated in a note to staff that the company has chosen to streamline costs and headcount, given the uncertain economy and future.
Amazon’s stock fell by 1.8% after the announcement, and the decision adds to a continuous drumbeat of layoffs in the technology sector. Other tech giants such as Microsoft Corp and Alphabet Inc have also been forced to cut ties with a significant number of employees due to economic concerns.
Last week, Facebook’s parent company, Meta Platforms Inc, announced plans to cut 10,000 jobs this year, following the elimination of over 11,000 roles in 2022. The Athena Coalition, a labor and activist group critical of Amazon, released a statement saying that none of these layoffs need to happen, and Jassy is choosing to make them happen to boost Amazon’s bottom line.
In recent months, Amazon has also scaled back or shut down entire services, such as its virtual primary care offering for employers. The Wedbush Securities analyst, Michael Pachter, said that this decision may not mean much for other companies, except that they will be more cautious before allowing their headcount to increase in the future.
In conclusion, Amazon’s latest job cuts come as no surprise given the current economic climate and uncertainty. However, the decision to lay off 9,000 employees, including those in highly profitable divisions, marks a significant shift for the company.
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