Rumors of pre-Black Friday layoffs at Amazon look like a clear recession signal

 

By Clint Rainey

November 14, 2022
 

First Meta, Stripe, Snap, and Twitter.

Now Amazon: A round of mass layoffs is coming for the e-commerce juggernaut.

According to reports on Monday, Amazon is preparing to lay off as many as 10,000 employees, marking its largest-ever round of job cuts, though only about 1% of its total global workforce.

The cuts will reportedly begin as soon as this week, and they’re said to focus on corporate and technology jobs, specifically the retail side, human resources, and Amazon’s devices unit, including Alexa—a division reportedly losing as much as $5 billion a year. The New York Times, which first reported the news, says the total number of layoffs “remains fluid,” but 10,000 would equal about 3% of Amazon’s corporate head count.

 

Rumors of pre-Black Friday layoffs at Amazon look like a clear recession signal

The news comes just weeks before the beginning of the holiday shopping season, which Amazon is already hyping up in announcements, outlining plans “to release millions of Black Friday deals.” It’s an incredibly busy time of year for Amazon, and one for which, in previous years, it’s tried to depict control and stability. This year, though, that narrative is colliding with a gloomy market and investor pressure to trim business fat.

November has been a tough month if you work in Big Tech. Two weeks ago, online payments giant Stripe laid off 14% of its 8,100-person workforce. The same day, Elon Musk began laying off half of Twitter’s employees. Last week, Meta axed about 11,000 people, about 13% of its total—the company’s first mass layoff in 18 years.

Amazon’s timing might especially infuriate critics, however. Two events occurred within hours of each other: press reports of Amazon laying off 10,000 workers, and Jeff Bezos announcing big plans to donate “most of his” $124 billion fortune to charity. In an interview given to CNN with his girlfriend, Lauren Sanchez, at his side, Bezos said the two of them were making preparations “to give away” his money. The trick was finding a way to maximize impact so those gifts would be able to unify humanity, rather than divide it. “It’s really hard,” Bezos told CNN. “There are a bunch of ways, I think, that you could do ineffective things.”

Normally at this time of year, Amazon is hiring tens of thousands of seasonal factory workers to help with the extra leap in holiday orders. In September, news broke that Amazon was closing or abandoning plans for 42 facilities (about 25 million square feet of warehouse space), while also delaying opening another 21 locations (about 28 million square feet). It has separately been trying to sublease at least 10 million square feet of warehouse space.

In October, Amazon still announced that it aims to hire 150,000 temporary warehouse workers for the season. But Bezos was busy warning the country that it’s time to “batten down the hatches” in “this economy.” Since taking over for Bezos, CEO Andy Jassy has shown less appetite for risk, generally putting profits before growth. The end of lockdowns and return of in-store shopping saddled Amazon with unused warehouse space and too many employees. It nuked roughly 100,000 factory jobs in 2022’s second quarter, its worst-ever quarter-to-quarter reduction. Last quarter’s growth was Amazon’s slowest in almost two decades.

Meanwhile, Amazon last week debuted its latest warehouse innovation: Sparrow, a robot that can “detect, select, and handle individual products in our inventory,” a task that had belonged exclusively to its warehouse workers.

Fast Company

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