Amazon has announced that it is planning to cut down the number of employees by almost 18,000 across the globe. This number marks the highest number of employees being let go by the company since its start. Currently, Amazon’s workforce includes around 1.5 employees globally, and these layoffs will be done on a global level. The company has yet not made it clear which country will be exposed to layoffs. But the company has made it clear that it will be cutting down the employee number from its physical shops such as Amazon Fresh and its HR division. Andy Jassy, the President and CEO of Amazon, said that the reason behind these layoffs is the uncertain economy and the rushed hiring done by Amazon in the past. During the memo shared with the Amazon employees, he said that there is a significant amount of thinking before taking these decisions and the management does not underestimate the impact such decisions may have on people’s lives. He also said that the company had no intention of annoying these layoffs this early but was forced to do so after one of Amazon's employees leaked the information related to layoffs.
Amazon is considered the biggest e-commerce platform in the world because of its tremendous reach. Amazon is almost present in every country on the planet and can deliver any product on its website within a week of ordering. The sheer number of employees working for the company has enabled Amazon to have a wider reach and the ability to deliver products within such a short amount of time. But during the pandemic, Amazon reported slowed down sales as the world was forced to undergo lockdown. Even though the delivery of necessary and life-saving products was allowed, it was significantly low revenue in comparison to their previous revenue numbers. During the post-COVID-19 period, the world is now experiencing a slowed economy due to the ongoing war between Ukraine and Russia. This has also increased inflation in many well-established economies, forcing people to spend their money with caution. This has remarkably slowed Amazon’s business across many countries. Because of this, companies are also being forced to cut down their unnecessary costs such as advertising and marketing expenses, and focus on their core operations. Amazon has reduced funding for Amazon Echo and its delivery robots because of slowed business growth. As a part of similar cost-cutting measures, Amazon has decided to cut down its workforce by 18,000.
Many companies have already cut down their workforce by letting go of thousands of employees. This primarily includes tech companies such as Meta, Google, Twitter, Microsoft, etc. as tech products or services are not necessary or lifesaving. This has resulted in slowed growth and decreased revenue for these companies. 2022 was not a promising year in terms of the economy as the world struggled with the energy crisis and supply chain disruptions due to the war between Russia and Ukraine. Many economists have said that the conditions are not expected to get any better in 2023 as well. It will not be surprising if other companies follow Amazon and decide to do layoffs.
