Amazon prepares to lay off 18,000 workers

E-commerce giant Amazon is bracing for the biggest wave of layoffs in company history as the collapse of the tech industry deepens. The company will lay off more than 18,000 employees worldwide.

Layoffs that began last year were previously expected to affect around 10,000 people. However, the information received showed that these estimates will be exceeded.

While central banks raising interest rates due to high inflation slowed economic growth, this situation hit tech companies the hardest.

Inflation, rising interest rates, and falling demand forced tech companies to cut costs, as these companies began laying off employees to cut costs. The latest victims of the wave of layoffs have been Amazon workers.

CEO ANNOUNCED

Amazon CEO Andy Jassy briefed staff on the layoffs in a memo on Wednesday. Consequently, the layoffs will be concentrated mainly in Amazon’s retail division and in corporate divisions such as human resources.

“Amazon has been through uncertain and difficult economic times in the past,” Jassy said. “These changes will help us track our long-term opportunities with a stronger cost structure.”

Covering 18,000 people, the denial is estimated to be the largest staff cuts ever made by tech companies during the current slowdown. This means that Amazon, which has more than 1.5 million employees at the end of September, will reduce its workforce by about 1 percent.

SHARES ARE UP

Amazon investors responded positively to the layoffs. Shares of the company rose nearly 2 percent after the Wall Street Journal announced the plan.

Morgan Stanley US equity strategist Mike Wilson said the tech layoffs were critical to protecting profit margins amid slowing economic growth.

“The tech giants can’t do a good job of cutting costs because these companies are focused on growth. “Layoffs are processes that can take longer than you think and lead to further declines in margins.”

DESIGNS ARE SPREADING

On the other hand, Amazon is not the first tech company to experience mass layoffs. The tech giants have recently started going through one staff cut after another.

Layoffs extended to companies working in the financial technology field, as well as giants such as Microsoft, Amazon, Meta, Netflix, Twitter. Finally, yesterday, software company Salesforce announced that it plans to cut about 10 percent of its workforce.

According to data from Layoffs.fyi, which digitally tracks layoffs, 1,018 tech companies around the world laid off 153,678,000 people in 2022.