The CEO of the tech giant had set the tone last November, during the distribution of a memo announcing layoffs to come until 2023. The estimate of the number of people affected was revised upwards this Thursday January 5 in a new message from Andy Jassy: “just over 18,000” jobs will be cut this year within Amazon, including in Europe, instead of 10,000.
This announcement is accompanied by little information on the distribution of job cuts, but it is accompanied by an unbearable suspense for the employees of the group. The manager only specified that the employees affected should wait until January 18 to be contacted by the company. He said he decided to announce “this news quickly” after it was “leaked” by an employee.
Chain layoffs after massive hiring
The group had hired with a vengeance during the pandemic to meet the explosion in demand, doubling its global staff between the beginning of 2020 and the beginning of 2022. It thus had 1.54 million employees at the end of September, not including seasonal workers. recruited during periods of increased activity.
But according to the CEO, the review of the “annual planning (….) has been more difficult this year given the economic uncertainty and the fact that we have been hiring heavily in recent years”. In question, inflation which does not spare the tech sector. The major platforms with an economic model based on advertising are particularly faced with budget cuts by advertisers, who are reducing their expenses in the face of rising prices and interest rates. Amazon saw its net profit fall by 9% over one year in the third quarter. It still reached $2.87 billion for the July-September period.
“These changes will help us pursue our long-term opportunities with a stronger cost structure,” Andy Jassy said. “Companies that last for a long time go through different phases. They are not in a mode of massive staff expansion every year,” he continued. But “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” he said.
The tech giants are shedding one by one in the face of inflation
The layoffs are the most massive staff reduction in Seattle company history. It is also the largest job cut plan among recent workforce reduction announcements affecting the technology sector in the United States.
And they were many. Among them, the Snapchat social network cut 20% of its workforce at the end of August, or more than 1,200 employees. In November, Facebook’s parent company “Meta” announced the loss of 11,000 jobs, or 13% of its workforce. Twitter, bought in October by Elon Musk, recently fired half of its 7,500 employees. Last to date, the American IT group Salesforce also announced this first week of January 2023 to part with 20% of its workforce, or 1,200 people.