Amazon will lay off over 18,000 employees, with the majority focused on Amazon Stores and the People, Experience, and Technology (PXT) organizations, Andy Jassy, the company’s CEO, announced. The U.S. online retailer plans to start talking to employees or representative bodies from Jan. 18.
Amazon had already imposed a hiring freeze last year in view of the uncertain economic situation. The layoffs are now a major step toward making significant savings. In recent months, high inflation has not only made customers reluctant to buy but also led to massive cost increases. To make matters worse, Amazon noticeably increased the number of its employees during the pandemic, when online retail was experiencing an immense boom. In retrospect, however, this was premature, and the staff had to be downsized again. According to media reports, Amazon still employed 1.62 million people in the first quarter of 2022; by the end of September, it had only 1.54 million employees (excluding seasonal staff).
“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so. These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy at this time when we’re not hiring expansively and eliminating some roles. Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” Jassy said.
In anticipation of a further deterioration of the economic situation, Amazon has also taken out a loan for $8 billion, Amazon Watchblog reported. The loan was made available by DBS Bank and Mizuho Bank, among others. According to the company, the money will be used for “general corporate purposes.”
