Amazon, the world’s largest e-commerce company, will launch massive layoffs. The New York Times (NYT) obtained an internal report on the 14th (local time) and reported that Amazon plans to lay off about 10,000 people starting this week.
The cuts will be concentrated on technical jobs, retail sectors, and human resources organizations. As of the end of June, Amazon employees totaled 1.5 million worldwide, including contract workers, and the number of people reduced this time is not 1%. However, it is the largest ever in terms of the number of people.
Amazon previously announced that it would stop hiring in the retail sector last month and stop hiring in other sectors on the 3rd. Amazon layoffs are interpreted as a result of a sharp increase in the number of employees during the COVID-19 period and sluggish performance prospects.
At the end of 2019, Amazon had 798,000 employees. Two years later, at the end of 2021, after the COVID-19 pandemic, the number surged to 1.6 million. This is because Amazon started hiring a large number of workers as delivery soared during this period.
However, Amazon has begun massive layoffs at a time when concerns over an economic slowdown are expected to continue and its performance is expected to deteriorate. Amazon estimated sales of $140 billion to $148 billion in the fourth quarter, which was far below the previous estimate of $155.15 billion. As a result, the stock price plunged and the market capitalization fell below $1 trillion in 31 months.
Not only Amazon, but other Silicon Valley companies have also started to cut their jobs one after another. The Washington Post (WP) reported on the 14th that Twitter, Facebook’s parent company Meta, payment platform Stripe, software service company Salesforce, and ride-sharing company Lyft recently fired all employees at a double-digit rate. In the meantime, Silicon Valley companies said they fired 20,000 employees last week. The management of companies that conducted the job cuts pointed out various backgrounds such as excessive hiring, slowing e-commerce activities, and the possibility of an economic slowdown during the COVID-19.
WP said, “In Silicon Valley, the strong market, which has created huge wealth in the economy over the past decade, is completely over,” adding, “It reminds us of the image of what we will experience in the rest of the economy if the economic downturn becomes a reality.”