Amazon is planning to lay off thousands of employees and implement cost-cutting measures because the past few quarters have not been profitable, according to reports. The company could fire up to 10,000 employees as of this week, according to reports The New York Times.
If the total number of layoffs remains around 10,000, it will be the largest layoffs in Amazon’s history. It would represent less than 1 percent of the workforce at a company that employs more than 1.6 million globally.
The New York Times, citing anonymous sources, reported that the job cuts will target the group of devices, including the group responsible for the Alexa voice assistant, along with the retail and human resources department.
Amazon, after a months-long review, has warned employees in some unprofitable units to look for other opportunities within the company, The Wall Street Journal reported,.
The report comes just weeks after the e-commerce giant warned of slowing growth in the busy holiday season, the period when it had its highest sales. Amazon said this is because consumers and businesses have less money to spend due to higher prices.
The world’s largest online retailer has spent most of this year adjusting to a sharp slowdown in e-commerce growth as shoppers resume pre-pandemic habits. Amazon has postponed warehouse openings and suspended hiring in its retail group.
Amazon CEO Andy Gacy has vowed to streamline operations amid slowing sales growth and economic uncertainty.
The Alexa division has always been at risk of downsizing because group voice-activated devices haven’t yet become essential gadgets and often end up in consumers’ wardrobes.
After experiencing “the most profitable era ever” during the COVID-19 pandemic years, which saw massive growth in online consumer spending, “Amazon’s growth has slowed to the lowest rate in two decades as the pandemic revolution unfolds.” said the report.
Amazon is the latest Technology company to make deep cuts for its employee base to prepare for a possible economic downturn.
Last week, Twitter reduced nearly 50% of its workforce after selling it to Elon Musk. Facebook’s parent company Meta also fired 11,000 employees.
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