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Amazon to lay off a lot more employees than initially planned

By:
on Jan 5, 2023
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  • Amazon.com Inc says it will lay off 18,000 of its employees worldwide.
  • Richard Kramer reacts to the news on CNBC's "Worldwide Exchange".
  • Amazon shares are now trading below their COVID pandemic low.

Amazon.com Inc (NASDAQ: AMZN), on Thursday, revealed plans of laying off 18,000 employees worldwide – a much bigger number than the one it suggested in its previous update.

Amazon shares in the red again

According to the tech behemoth, majority of these job cuts will affect its store employees and ones in the PXT (People, Experience, and Technology) groups. In a memo to employees, CEO Andy Jassy wrote:

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These changes will help us pursue long-term opportunities with a stronger cost structure. However, I’m optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles.

A day earlier, its cloud peer Salesforce Inc also said it will lower its global headcount by about 10% (read more). Amazon shares are now trading below the low they made at the peak of the COVID crisis.

Expert sees more job cuts ahead

At the end of Q3, Amazon.com Inc had a massive workforce comprising 1.54 million people after it aggressively overbuilt capacity during the pandemic.

The multinational will start to inform those that are being let go from January 18th. Reacting to the announcement on CNBC’s “Worldwide Exchange”, Richard Kramer of Arete Research said:

We’re seeing the first round of cuts that typically come in threes. First cut is to look at everything that’s not essential and shed that. Then, you look at what you can do to improve productivity. And I think third round is a way away from now.

Despite the ongoing tech layoffs, Automatic Data Processing (ADP) reported a meaningfully better than expected growth in monthly private payrolls on Thursday.