Amazon’s downsizing will be larger than originally expected. In November, there was only talk of 10,000 jobs. This is the company’s first major staff reduction. CEO Andy Jassy shared a note to company employees reporting the layoff of more than 18,000 employees.
The dismissal decisions, which Amazon will report as of January 18, will mostly affect the divisions of the stores (Amazon Stores) and that of PXT, which is the company’s human resources area. The cuts amount to 6% of the workforce, of approximately 300,000 people, and represent a rapid change for an entity that recently doubled his base salary cap.
uncertain economic environment
Amazon had about 1.5 million employees around the world. The vast majority were working on delivery and storage infrastructure. “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so. These changes will help us pursue our long-term opportunities with a stronger cost structure,” the CEO explained on the company’s blog regarding the uncertain economic environment in relation to high inflation and rising interest rates.
For the management team it has not been easy to make the decision, but they consider that this step is necessary to reduce costs. In previous years, the pandemic meant a change in consumption habits. The return to normality, the excess hiring and the slowdown in the economy have led to the point of having to reduce staff in the technology sector.
In the case of Amazon, it has gone from being a business considered essential during the pandemic to deliver products to homes, to a company that hired and grew beyond its means to respond to demand.