Amazon to cut 18,000 jobs amid economic uncertainty

Retail behemoth Amazon said it will cut over 18,000 jobs, the largest number of employee terminations in its history, as it faces rising costs in an “uncertain economy.”

In a memo to staff, CEO Andy Jassy said Amazon managers had been looking at the company’s workforce levels and that it had to make the “difficult decision to eliminate roles.”

"We don't take these decisions lightly or underestimate how much they might affect the lives of those who are impacted,” further explaining that "companies that last a long time go through different phases. They're not in heavy people expansion mode every year.”

Neil Saunders, Managing Director of GlobalData Retail, Tweeted the job cuts are a “big number, but don't forget Amazon has grown its workforce by c743,000 people since 2019 - some of which was based on irrational exuberance during the pandemic. We're now in a different era and Amazon is on a diet. I'd say even more cuts are likely in the months/years ahead.”

This is Amazon’s second round of job cuts after layoffs in November, with the majority of reductions in its retail and human resources divisions.

The cost-cutting was necessary for the long term, Mr Jassy said, however “I’m also optimistic that we’ll be inventive, resourceful and scrappy in this time when we’re not hiring expansively and eliminating some roles.”

Reductions necessary for the long term

A multitude of layoffs across big tech companies have been announced recently, including reductions at Facebook parent Meta, software giant Salesforce, which said it would reduce 10 percent of its workforce, and Twitter, which in its shakeup under new owner Elon Musk saw a reported 4,400 workers laid off.