Amazon will cut 18,000 jobs

E-commerce giant Amazon announced Wednesday night that it will remove “just over 18,000” Job positionsincluding some in Europe, in another sign of the difficulties of the technology sector in the United States.

In a message to employees, also posted on the company’s website, the CEO of AmazonAndy Jassy said that mainly group-operated stores and human resources will be affected.

Already in November, various US media had reported that the company based in Seattle, in the northwest of USAplanned to lay off about 10,000 employees.

Amazon had confirmed job cuts without saying how many positions would be affected.

In her post on Wednesday, Jassy said she chose to break the news about the amount of cuts “earlier” than planned, as it had been leaked by an employee.

The manager indicated that the affected employees “or their representatives”, in the case of Europe, will be contacted by the company as of January 18.

“The review of our annual planning (…) has been more difficult this year given the economic uncertainty and the fact that we have recruited massively in recent years,” Jassy explained.

In fact, the distribution group hired heavily during the covid-19 pandemic to cope with the explosion in demand, doubling its global headcount between early 2020 and early 2022.

Amazon had 1.54 million employees worldwide at the end of September, not including temporary workers hired during peak periods, particularly during the holiday season.

“Amazon has weathered uncertain and difficult economic times in the past, and we will continue to do so,” Jassy said.

“These changes will help us pursue our long-term opportunities with a cost structure more solid (…) Companies that last a long time go through different phases. They’re not in massive headcount expansion mode every year,” he added.

Layoffs in the technology sector

This job cut plan is the largest among recent announcements of workforce reductions affecting the technology sector in the United States.

Amazon’s layoffs are also the largest downsizing in the history of the company founded in 1994 by Jeff Bezos.

“While the scale of Amazon’s layoffs may be shocking, they must be seen in the context of the massive expansion the company has undertaken over the past five years,” said Neil Saunders, an analyst at GlobalData.

“All of this activity was based on the mistaken assumption that sales of Amazon products and services would continue to grow at a healthy rate,” he added.

In a more difficult general environment for technology companiesAmazon saw its net profit fall 9 percent year-on-year in the third quarter.

And for the last quarter, Amazon anticipated weak growth by its standards in November, between 2% and 8% in one year, and an operating profit of between 0 and 4,000 million dollars, against 3.5 for the same period of 2021.

Amazon plans to announce its annual results on February 1.

In the technology sector, several large platforms that base their business models on advertising revenue are facing budget cuts by advertisers, who reduce their spending in the face of inflation and rising interest rates.

Metathe parent company of Facebook, announced in November the loss of 11,000 jobs, or about 13% of its workforce.

At the end of August, Snapchat cut about 20% of its workforce, or more than 1,200 employees.

Twitterbought in October by Elon Musk, for its part laid off about half of its 7,500 employees.

The US IT group Salesforce, specializing in management and cloud (remote computing) solutions, announced on Wednesday that it will lay off around 10% of its employees, or slightly less than 8,000 jobs.