Amazon To Cut 18000 Jobs Citing Economic Uncertainty – Amazon has stated that it will cut more than 18,000 jobs, the largest number of layoffs in the history of a U.S. company, while business software maker Salesforce will lay off 8,000 employees in the latest purging of tech jobs. Amazon cited “the uncertain economy” and said the e-commerce giant had “hired rapidly over the last several years” in making the announcement on Wednesday.
Its chief executive, Andy Jassy, said in a note to employees: “Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles.” He said Amazon had weathered “difficult economies” in the past and would continue to do so. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”
People Also Read: Layoffs Spread Across the Blockchain Industry as Bear Market Cycle Impacts Crypto Firms
Jassy said the layoffs would mostly affect the company’s brick-and-mortar stores, which include Amazon Fresh and Amazon Go, and its PXT organizations, which handle human resources and other functions. He did not specify where the affected roles were located, but Jassy said in the statement that Amazon would communicate with affected employees “or where applicable in Europe, with employee representative bodies” from 18 January.
The job reductions are a sharp reversal for the retailer, which just boosted its base salary cap to compete more aggressively for talent. Approximately 6% of Amazon’s approximately 300,000-person corporate workforce has been laid off. It has a global workforce of around 1.5 million. In November, Jassy informed staff that layoffs were imminent due to the state of the economy and the company’s fast expansion over the past few years.
The Wednesday announcement included unnumbered layoffs that had occurred previously. In addition to offering buyouts, the expansive Seattle-based company has been lowering costs in other parts of its operations. In the meantime, Salesforce said that it would lay off approximately 8,000 employees, or 10% of its staff. In the 23-year history of the San Francisco-based corporation created by former Oracle executive Marc Benioff, the layoffs announced on Wednesday are by far the largest.
He pioneered the approach of leasing software services to internet-connected devices, which is now referred to as “cloud computing.” The layoffs follow a reorganization of Salesforce’s upper management. Recently, Benioff’s hand-picked co-CEO Bret Taylor, who was also Twitter’s chairman at the time of its arduous $44bn sale to billionaire Elon Musk, left Salesforce. Taylor was also Twitter’s chairman at the time of its arduous $44bn sale to Musk.
Soon after, Slack co-founder Stewart Butterfield left. Salesforce bought Slack two years ago for nearly $28bn. Salesforce workers who lose their jobs would receive nearly five months of pay, health insurance, career resources and other benefits, according to the company. Amazon said it was also offering a separation payment, transitional health insurance benefits and job placement support.
Benioff, now the sole chief executive at Salesforce, told employees in a letter that he blamed himself for the layoffs after continuing to hire aggressively in the pandemic, with millions of Americans working from home and demand for the company’s technology surging. “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Benioff wrote.
People Also Read: Goldman Sachs Boss Unveils Plan To Cut Jobs Amid Global Economy Fears
Salesforce employed about 49,000 people in January 2020, just before the pandemic struck. Salesforce’s workforce today is still 50% larger than it was before the pandemic. The CEO of Meta Platforms, Mark Zuckerberg, also acknowledged he misread the revenue gains that the owner of Facebook and Instagram was reaping during the pandemic when he announced in November that his company would lay off 11,000 employees, or 13% of its workforce.
