The American based ecommerce giant company Amazon has announced that it will lay off over 18,000 employees from its workforce citing an “uncertain economy” and “over hiring” in past years. The company is set to shed off 6 percent of its workforce, Chief Executive Andy Jassy said in a public staff note on Wednesday.
The layoff decisions, which Amazon will communicate starting Jan. 18, will largely impact the company’s e-commerce and human-resources organizations, he said.
Amazon has more than 1.5 million workers including warehouse staff, making it America’s second-largest private employer after Walmart Inc (WMT.N). Its stock rose by 2% in after-hours trade.
Jassy said in the note that annual planning “has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years.”
Amazon has braced for likely slower growth as soaring inflation encouraged businesses and consumers to cut back spending and its share price has halved in the past year.
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The company began letting staff go in November from its devices division, with a source telling Reuters at the time it was targeting around 10,000 cuts.
The tech industry shed more than 150,000 workers in 2022, according to tracking site Layoffs.fyi, a number that’s continuing to grow. Salesforce Inc (CRM.N) said Wednesday it planned to eliminate about 10% of staff, which numbered nearly 8,000 as of Oct. 31.
The reversal of Amazon’s fortunes has been stark. It changed from a business deemed essential during the pandemic for delivering goods to locked-down homes, to a company that overbuilt for demand. Its layoffs now surpass the 11,000 cuts announced last year by Facebook-parent Meta Platforms Inc (META.O).
Jassy’s note followed a report in the Wall Street Journal that the reduction would be more than 17,000 jobs. He said Amazon chose to disclose the news before informing affected staff because of a leak.
Amazon still must file certain legal notices about mass layoffs, and it plans to pay severance.
Jassy said, “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so.”
