Amazon to Lay Off 10,000 Employees As Growth hits Slowest Rate in Decades and Losses Rise

Amazon will lay off about 10,000 employees this week, reports have said, as the Jeff Bezos company becomes the latest tech giant to sack staff en-masse in the wake of worsening global economic conditions.

The mass layoff was reported by The New York Times reported on Monday. The outlet cited unnamed sources familiar with the matter for the report. "Amazon's growth slowed to the lowest rate in two decades, as the bullwhip of the pandemic snapped," the NYT report said. Amazon had recorded blistering growth during the pandemic years as people across the world stayed home and worked from home. Amazon had also seen a fast-paced staff expansion in the immediate aftermath of the pandemic.

Amazon founder Jeff Bezos in quotes

Shares Down 40% This Year

Amazon has about 1.5 million employees globally, meaning the layoff plan will hit about 1 percent of the workforce. Amazon had announced a hiring freeze on November 3 after reporting lackluster earnings. The October earnings had missed analysts' revenue expectations even as the company gave a bleak fourth quarter guidance. Amazon shares have lost 40 percent so far this year.

Most of the sacked workers will be from Amazon's Alexa group, which loses more than $5 billion a year, according to the Wall Street Journal. Apart from the devices business that makes Alexa-powered products among other things, the human resources and and the retail units will also be affected.

Other tech giants like Facebook parent Meta and Twitterhad also recently announced mass layofffs. The tech industry is struggling as the economy slows in the wake of rising interest rates and steep inflation.

job cuts

Tech Companies Trimming Jobs

With economic gloom catching up, several companies, especially, tech organizations, have either announced job cuts or frozen hiring.

Many Big Tech companies like LinkedIn, Meta, Oracle, Twitter, Nvidia, Snap, Uber, Spotify, Intel and Salesforce have either laid off employees or frozen hiring amid the global economic downturn.

While Meta laid off 11,000 workers in October, Twitter cut 3,700 jobs after the takeover by billionaire Tesla CEO Elon Musk. Earlier, Snap laid off some 20 percent of its workforce and Lyft cut nearly 700 jobs.

Also last month, tech firm Philips announced to slash 4,000 jobs as the company faces "multiple challenges" which was reflected in its Q3 earnings.

New Philips CEO Roy Jakobs said the move to improve productivity and agility "includes the difficult, but necessary decision to immediately reduce our workforce by around 4,000 roles globally, which we do not take lightly and will implement with respect towards impacted colleagues."

Earlier this year, Google executives had warned workers to either boost performance or prepare to leave. An internal message circulated among the employees warned that "there will be blood on the streets" if the next quarterly earnings are not good.

Shockingly, tech giant Apple laid off recruiters after warning earlier that an economic downturn was forcing a hiring freeze. Bloomberg News reported that as many as 100 contract workers have been fired, indicating the spending squeeze at the iPhone maker.

The development came two weeks after Apple reported record revenues in the quarter ended June 30.

Japan's work hours
Office workers are reflected in a glass railing as they cross a street during lunch hour in Tokyo June 1, 2015. REUTERS/Thomas Peter/File Photo GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH BUSINESS WEEK AHEAD SEPTEMBER 26 FOR ALL IMAGES Reuters

In July, Microsoft laid off hundreds of employees ahead of its quarterly earnings and amid growing economic uncertainty. The move, the company said, was in a bid to "realign" groups and roles after the close of its fiscal year on June 30, even as the company intends to grow its headcount in the coming months.

Tesla said in June it was planning to axe 10 percent of staff, along with freezing hiring amid stalled Twitter deal, global macroeconomic conditions like chip shortage, rising inflation and high interest rates. Elon Musk had emailed Tesla executives, telling them the electric car-maker needs to pause hiring worldwide and cut its workforce by about 10 percent.

In early July, Meta boss Mark Zuckerberg warned employees that the company was facing one of the worst downturns in its history and that job losses are certain in the near future. The CEO of the tech giant that owns social media companies Facebook and Instagram said in uncertain terms there will be a scaling back of operations and employee departures owing to the tight financial squeeze the behemoth is facing.

Chinese tech giant Tencent said last week it sacked a whopping 5,500 employees after the June quarter revenue dipped 3 percent, which was the company's first quarterly revenue slip after listing.

Earlier in March, Reuters had reported that Alibaba Group and Tencent Holdings were preparing to cut tens of thousands of jobs combined this year.

Smartphone giant also has cut more than 900 jobs as the Chinese economy is witnessing a slowdown. The smartphone giant had revealed that its revenues fell 20 percent in the June quarter. The layoffs affected nearly 3 per cent of Xiaomi's workforce, according to the South China Morning Post.