The wave of layoffs at the world’s largest online mail order company Amazon turns out to be significantly larger than initially assumed. CEO Andy Jassy (54) announced in a memo to employees that more than 18,000 jobs would be cut. In November there was talk of only 10,000 jobs.
This is the first major downsizing in the history of the US company, which was founded in 1994. Amazon recently had around 1.5 million employees worldwide, most of them working in the delivery and warehousing infrastructure.
“Amazon has endured uncertain and insecure economic situations in the past and will continue to do so,” explained CEO Jassy in the company blog with a view to the difficult economic environment in view of high inflation and rising key interest rates. The management team is aware of how difficult the layoffs are for those affected and does not make such decisions lightly. But the step is necessary to reduce costs.
Layoffs since the end of October
Amazon had already started cutting jobs on a large scale 10 weeks ago. Since the end of October, the share has fallen by around 30 percent – from 120 to currently 80 US dollars. In previous years, there was a hiring offensive due to the online order boom during the pandemic. The stock has lost almost 50 percent of its value in five months. While it was still listed at 142 euros in August, its value on Wednesday was 80 euros.
The wave of terminations initially affected the burdened device division around the Echo smart speaker and the Alexa language assistant program. But Jassy had already prepared the employees for further job cuts in mid-November and signaled that there would also be layoffs in the coming year.
The job cuts should now be even more far-reaching and include additional divisions. According to Jassy, management initially wanted to communicate this more confidentially to those affected. But this was not possible because the plans had been leaked. The US financial newspaper “Wall Street Journal” had previously reported on this, citing insiders.
On Wednesday, the US software manufacturer Salesforce aannounced that they wanted to get rid of every tenth employee. Last had the SAP-Rivale claims to have more than 79,000 employees worldwide as of December. This means that almost 8,000 jobs are likely to be lost at the sales software specialist. Salesforce only disappointed investors with its outlook for the final quarter at the end of November. In addition, the group had announced at the time that co-CEO Bret Taylor was leaving his post.