Amazon.com Inc. laid off more than 17,000 employees — a larger number than previously planned — in the latest sign that the tech downturn is deepening, according to the Wall Street Journal.
The cuts, which began last year, were previously expected to affect around 10,000 people. The reduction is concentrated in the company’s corporate ranks, according to the Journal, which cited people not familiar with the matter.
Although the prospect of layoffs has been on the horizon for months at Amazon — the company has admitted that it has been hiring too many people during the pandemic — the growing number suggests the company’s outlook has darkened. It joins other tech giants to make major cuts. Earlier Wednesday, Salesforce Inc. announced plans to lay off about 10% of its workforce and reduce its real estate holdings.
Amazon investors are reacting positively to its latest belt-tightening efforts, betting it could boost profits at the e-commerce company. Shares rose nearly 2% in late trading after the report.
Losing 17,000 workers would be the biggest cut for a tech company during the current slowdown, but Amazon also has a larger workforce than its peers in Silicon Valley. It had more than 1.5 million employees at the end of September, meaning the latest cuts will represent about 1% of its workforce.
While the company planned the cuts in November, a spokeswoman said Amazon has about 350,000 corporate employees worldwide.
The world’s largest online retailer spent the end of last year adjusting to rapid e-commerce growth as shoppers returned to pre-pandemic habits. Amazon has delayed warehouse openings and stopped hiring at the retail group. It expanded the freeze for the company’s staff and then began to cut.
Chief Executive Officer Andy Jassy has eliminated or limited experimental and unprofitable businesses, including teams working on telehealth services, delivery robots and children’s video calling devices, among other projects.
The Seattle-based company is also trying to match excess capacity with cooling demand. One such effort includes trying to sell excess space on cargo planes, according to people familiar with the matter.
The first wave of cuts landed hardest on Amazon’s Devices and Services group, which builds the Alexa digital assistant and the Echo smart speaker, among other products. The head of the group told Bloomberg last month that the layoffs at the unit were less than 2,000 people, and that Amazon remained committed to the voice assistant.
Some recruiters and employees in the company’s human resources group were offered buyouts. Jassy told employees in November that more cuts are coming in 2023 in the retail and HR teams.
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