Amazon plans to lay off 10,000 employees this week

According to reports from the New York Times, Amazon is planning to lay off about 10,000 people in corporate and technology jobs starting as soon as this week.

Sources disclose that the impending job cut by the company would be the largest in the company’s history. Amazon founder Jeff Bezos confirmed that he would donate half of his wealth to charity.

The cuts will focus on Amazon’s device unit, which also includes the voice-assistant Alexa, as well as at its retail division and in human resources. The report also said the total number of layoffs remains fluid.

The total number of layoffs remains fluid. But if it stays around 10,000, that would represent roughly 3 percent of Amazon’s corporate employees and less than 1 percent of its global work force of more than 1.5 million, which is primarily composed of hourly workers.

The retail giant joins the trend of lay-offs by U.S tech companies. Last week, Meta laid off 13% of its workforce, the largest in its history. Twitter also cut off its workforce recently.

The cut for many of these companies is a brace to the harsh economic situations and projected potential downturn in the U.S economy.

After the pandemic’s demand boom and rapid expansion, Amazon’s retail business—including its offline and online retail operations and logistics division—has been struggling. The business has stated that it has scaled back its expansion plans and has informed investors that it believes customer confidence is low.

“We’re realistic that there’s various factors weighing on people’s wallets,” Brian Olsavsky, the finance chief, told investors last month. He said the company was unsure where spending was heading, but “we’re ready for a variety of outcomes.”

The company’s officials met with institutional investors last week, just as the company’s stock dropped to its lowest point since the beginning of the pandemic and lost $1 trillion in value since Andy Jassy became CEO last year.

Brad Glasser, an Amazon spokesman, declined to comment.

Read also: Amazon loses $1 trillion in market value, Meta fires 11,000 from its workforce

More on Amazon’s planned layoff

It is no longer news that the revenues of major tech companies have been taking a hit this past few months, which is definitely not far-fetched from the fact that the global economy is heading towards a downturn with biting inflations and higher interest rates.

In recent months, Amazon has scaled back some projects. These include Amazon Care, a service that offered primary and urgent medical care but could not attract enough customers. Also, Scout, a cooler-sized home delivery robot that, according to Bloomberg, employed 400 people, and Fabric.com, a division that sold sewing supplies for three decades.

According to the New York Times, Mr. Jassy, who previously ran Amazon’s lucrative cloud computing business, has been closely scrutinizing businesses to trim costs quickly. He initially pulled back on a supercharged warehouse expansion during the pandemic, then moved to other parts of the company.

From April through September, the company had reduced head count by almost 80,000 people, primarily shrinking its hourly staff through high attrition.

In September, Amazon stopped hiring for a number of its smaller teams. Its primary retail operation ceased filling more than 10,000 unfilled positions in October. It temporarily halted corporate hiring two weeks ago throughout the whole organization, including its cloud computing section.

The fact that the tech giant is planning to make cuts during this crucial holiday shopping season when the company has historically valued stability demonstrates how swiftly the struggling global economy has pressured Amazon to cut operations that have been overstaffed or underperforming for years.

Although the pandemic produced Amazon’s most profitable era on record, doubling its workforce as consumers flocked to online shopping and companies to its cloud computing services, the company witnessed its slowest growth rate in two decades.

Initially, the company had intended to expand and try new experiments based on the successes recorded during the pandemic. Still, the company’s sales were negatively impacted due to high costs from decisions to overinvest and quickly expand, along with consumer behavior and high inflation.

Amazon experienced a slight rebound in its latest quarter. But it has cautioned investors that growth could weaken again, possibly falling to its lowest pace since 2001.

Internally, devices and Alexa have always been considered vulnerable to cuts as Amazon rushed to develop the best voice assistant, which officials believed could replace mobile phones as the next indispensable consumer interface

Hundreds of millions of Alexa-enabled gadgets have been sold by the corporation. However, according to Amazon, the products frequently have low-profit margins, and alternative revenue streams like voice shopping have not gained traction.

Read also: Amazon finally increases workers’ pay by $1, as Apple stocks dip + other global tech updates