The Job Cuts by Amazon: Causes & Effects
In the struggling economy, various companies have decided to lay off employees, a decision which affects not only the staff but also these companies. One of these companies is Amazon which now struggles to save costs by cutting more than 18,000 jobs, the greatest number reported in history. This e-commerce company has approximately 1.5 million employees globally and even though it didn’t state which country the job reductions would take place in, it was said that they would be mostly in Europe.
The official announcement was a result of an employee leaking information about the job cuts. Most reductions will be initiated from its shops which include Amazon Go and Amazon Fresh as well as its Human Resources division. These cuts are a result of the uncertain economical situation and because Amazon has hired several individuals rapidly over the years. During the coronavirus pandemic, business for Amazon was successful as most people spent their time at home and ended up spending a ton of money online. However, sales ever since then have been significantly low.
Amazon has announced the exclusion of projects like delivery robots and Alexa, because even though they were progressive and good to have, they were not really a good source of income. Other firms including cloud based businesses and Meta, which owns WhatsApp, Facebook and Instagram have also announced big cuts in their staff which will cause several individuals to lose their jobs. Employees which are affected by these job reductions are to be informed by January 18, 2023. This move came after Amazon said in 2022 that they would reduce their headcount without stating the number of jobs that would be lost.
Amazon was already preparing for this decision as it stopped hiring new staff members and also stopped expanding warehouses. The e-commerce company stated that it had over hired people during the global pandemic. It has also taken steps to shut down certain projects which include personal delivery robots.
Dan Ives from firm Wedbush Securities stated that he believes Amazon will face even more pain moving forward. Ten thousands of jobs are being reduced globally across the technology. Additionally, sales seem to be reducing and the public’s concern regarding the economic downturn increases by the day. In November, the owner of Facebook, Meta, announced that it would be cutting about 13% of its workforce. This is one of the first biggest lay-offs in the social media firm’s history which will result in 11,000 employees from a global headcount of 87,000, losing their jobs.
Meta announced in November that it’s workforce would be reduced by 13%. According to Mark Zuckerberg, the decision regarding the cuts made was one of the most difficult changes which were made in Meta’s history. As a result of this news, there were major layoffs at Twitter where half of its staff was cut after the firm was bought by Elon Musk, the multi billionaire.
Amazon began to lay off its staff in early November, according to LinkedIn posts by the employees who stated that they were impacted by these job cuts. These job lay-offs have and will leave several workers jobless, which is only one of the effects of the struggling economy.