Retail titan Amazon has begun the new year with some awful news: a historic downsizing of its workforce.
In a written update shared with employees on Wednesday, company CEO Andy Jassy said the previously reported layoff totals, pegged to be roughly 10,000 firings back in November, was a woeful underestimate.
“As I shared back in November, as part of our annual planning process for 2023, leaders across the company have been working with their teams and looking at their workforce levels, investments they want to make in the future, and prioritizing what matters most to customers and the long-term health of our businesses,” Jassy said.
The CEO then made it abundantly clear why the layoffs were imminent — the state of the economy under President Joe Biden.
“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” Jassy continued. “In November, we communicated the hard decision to eliminate a number of positions across our Devices and Books businesses, and also announced a voluntary reduction offer for some employees in our People, Experience, and Technology (PXT) organization.”
That’s when Jassy dropped the hammer. That aforementioned 10,000 figure? It nearly doubled.
“Today, I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles,” he said. “Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles. Several teams are impacted; however, the majority of role eliminations are in our Amazon Stores and PXT organizations.”
Jassy said Amazon is “deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted.”
According to Business Insider, the 18,000 layoffs amount to the largest single instance of downsizing in Amazon’s history.
The New York Times, meanwhile, reported this is the largest group of layoffs in the tech industry in recent months.
That’s significant given the firings that have rocked the sector in recent years. From massive entities such as Meta and Netflix to lesser-known companies such as Twilio, tech companies have not been immune to the harsh realities of the current economic climate.
And yet Amazon might have taken the worst blow of them all.
The Jeff Bezos-owned conglomerate has been facing a variety of issues for some time now.
Responding to some initial unionization in November, the company shortly revealed a new co-worker for all those freshly unionized employees:
Meanwhile, the Amazon Prime streaming service put out its much-hyped “Lord of the Rings” television series, only to be met with a bit of consternation.
“Tolkien is turning in his grave,” Twitter head honcho Elon Musk tweeted about “The Lord of the Rings: The Rings of Power.”
Now, having some bad reviews mixed in with good ones is hardly noteworthy, but that lukewarm reception was for a product that cost $715 million to make.
Costly shows and robot employees, however, are just side issues. The catalyst for the 18,000 lost jobs, as Jassy said, was an “uncertain economy” that has put the fear of God into tech entities.
That concern for the economy comes despite Biden touting just how important it is for him and his administration to create good-paying jobs on Wednesday.
“It’s about making things in America again. It’s about good jobs. It’s about the dignity of work. It’s about respect,” Biden said at one point in his speech.
It may very well be all about those things.
But it’ll be tough for the economy to ever truly bounce back if people aren’t working — regardless of whether it’s by choice or not.
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