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Amazon 'plans to cut 10,000 jobs' this week - roughly 1% of its global workforce
Amazon executives are set to lay off thousands of employees with just weeks to go before the busy holiday season as the tech sector braces for a recession.
According to the New York Times, the online retailer plans to layoff 10,000 people in corporate and technology jobs as early as this week in what would be the largest job cuts in the company's history.
The announcement comes on the heels of mass layoffs at tech giants such as Meta, Twitter and Microsoft - which has put thousands of employees out of work. Additionally, Apple - the world's most valuable company - has reportedly slowed its hiring process, according to CEO Tim Cook.
For Amazon, the cuts will focus primarily on the company's devices, including voice-assistant Alexa, sources familiar with the discussions said, as well as its retail division and human resources.
The move comes as the company reportedly lost $1trillion over the year after its stock plummeted last week - while Jeff Bezos promised to give away most of his $124billion fortune.
It remains unclear exactly how many jobs will be lost and whether the layoffs will only affect those in the United States or worldwide.
But if the company goes through with its proposal to cut 10,000 jobs, it would lose about 3 percent of Amazon's corporate employees — though the cuts would only represent less than 1 percent of its global workforce of more than 1.5 million, which primarily comprises hourly workers.
Amazon CEO Andy Jassy is said to be considering laying off 10,000 employees
If the company goes through with its proposal to cut 10,000 jobs, it would lose about 3 percent of Amazon's corporate employees
As of Monday morning, the company was trading at $98.81, down 42 percent from the same time last year
The proposed layoffs mark a dramatic turn of events for Amazon, which had seen its most profitable era during the COVID pandemic when people throughout the world were forced to stay at home.
It doubled its workforce over the course of just two years, and funneled its massive earnings into new projects.
And in an effort to hire even more employees earlier this year, Amazon more than doubled its cap on cash compensation for tech workers, citing 'a particularly competitive labor market.'
But in its quarterly earnings report at the end of September, executives warned investors that its growth may weaken — possibly to the lowest point since 2001 — amid record high inflation.
Then, just last week, the Times reports, Amazon executives met with institutional investors as its stock sank to its lowest level since the early days of the pandemic, costing the company $1trillion.
As of Monday morning, the company was trading at $98.81, down 42 percent from the same time last year.
Jassy became the CEO of the company last year, seeking to cut spending
Sources say CEO Andy Jassy was already looking at ways to pare down costs to the ever-expanding tech giant before considering the layoffs.
After he became CEO of the company last year, previously heading its cloud computing business, he immediately pulled back on a proposed warehouse expansion.
In the ensuing months, he also closed down or at least pared back initiatives like Amazon Care —a service providing primary and urgent health care that never garnered enough customers; Scout, the cooler-sized delivery robot; and Fabric.com, a subsidiary that sold sewing supplies.
And from April through September, the times reports, Amazon reduced its workforce by almost 80,000 — primarily by shrinking its number of hourly workers, and it froze hiring on several smaller teams in September.
By October, Amazon stopped filling more than 10,000 open roles in its retail business, before announcing just a few weeks ago that it froze corporate hiring across the company.
Among the initiatives Jassy is said to have pared down is Scout, a delivery robot the company was piloting
He also apparently closed down Amazon Care —a service providing primary and urgent health care that never garnered enough customers
But it was Amazon's devices and retail departments that insiders have long thought were the most at risk of being cut.
Amazon's Alexa and its related products were the company's priority as it sought to compete with Apple's Siri, doubling staff on Alexa and Echo products from 2017 to 2018.
It has since sold hundreds of Alexa-enabled devices, even as company executives have said the products are low-margin.
In 2018, Echo and Alexa cost the company about $5billion.
As a result, when Amazon introduced its new devices this fall at an annual event, it did not feature as much fanfare as in years past.
Meanwhile, Amazon's retail business, which covers its physical and online presence, has been under financial strain since the massive expansion during the pandemic, the Times reports.
Company executives have said they have pulled back on expansion, and told investors last month they see uncertainty with consumers.
'We're realistic that there's various factors weighing on people's wallets,' Brian Olsavsky, the financial chief, told investors.
He said the company was unsure where spending was heading amid historic inflation rates, but said 'we're ready for a variety of outcomes.'
Apple CEO Tim Cook told CBS Mornings on Monday he plans to freeze hiring
But Amazon's not the only major tech company that has been proposing massive layoffs in recent weeks.
After billionaire Elon Musk took over Twitter, he immediately halved the social media giants workforce. Similar cuts were also made at Meta — the parent company of Facebook — as well as Lyft and Microsoft.
On Monday, Apple CEO Tim Cook also told CBS Mornings that it is slowing some hiring as well.
'What we're doing as a consequence of being in this period, is we're being very deliberate in our hiring,' he said. 'That means we're continuing to hire, but not everywhere in the company are we hiring.'
At the same time, though, Cook said 'we don't believe you can save your way to prosperity."
'We think you invest your way to it,' he said.
Tech job cuts - including mass layoffs at Meta and Twitter - are accelerating
In recent weeks, a slew of tech companies have announced cost-cutting measures, with Amazon, Apple and Google-parent Alphabet all announcing hiring slowdowns or freezes.
For the tech sector, the pandemic boom has turned to a post-pandemic bust, as rising interest rates batter share prices and inflation cuts into profits.
The sector shed 9,587 jobs in October, the highest monthly total since November 2020, according to data from consulting firm Challenger, Gray & Christmas cited by Bloomberg.
Total job cuts announced by US-based employers jumped 13 percent to 33,843 in October, the highest since February 2021, a report said.
Meta
The Facebook-parent said in November it would cut 13 percent of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as it grapples with a weak advertising market and mounting costs.
Meta said it would cut 13 percent of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year
Like its peers, Meta aggressively hired during the pandemic to meet a surge in social media usage by stuck-at-home consumers.
But but the pandemic boom-times have petered out as advertisers and consumers pull the plug on spending in the face of soaring costs and rapidly rising interest rates.
After plunging billions into CEO Mark Zuckerberg's Metaverse vision with little to show for it, Meta has been faced with rising costs and shrinking profits.
Meta, once worth more than $1 trillion, is now valued at $256 billion after losing more than 70 percent of its value this year alone.
'Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I'd expected,' Zuckerberg said in a message to employees, according to Reuters.
'I got this wrong, and I take responsibility for that.'
Zuckerberg delivered the grim news about job cuts on a call with hundreds of Meta executives
On a short call on Wednesday, a red-eyed Zuckerberg addressed employees but took no questions.
He stuck to a script that closely followed the wording in the morning's blogpost and called the increased investments in e-commerce a 'big mistake in planning.'
Twitter laid off half its workforce across teams ranging from communications and content curation to product and engineering following Elon Musk's $44 billion takeover.
The cutbacks affected roughly 3,700 employees, who learned their fate by email last week.
However, Bloomberg on Sunday reported Twitter was reaching out to dozens of employees who lost their jobs, asking them to return.
Twitter laid off half its workforce across teams ranging from communications and content curation to product and engineering
Musk previously said there was no other choice but to impose mass layoffs as the company loses hundreds of millions of dollars every year and needs a financial overhaul
Salesforce
On Monday, cloud-based software company Salesforce quietly laid off hundreds of employees.
The exact number of jobs cut was unclear, but it was less than 1,000 according to CNBC.
'Our sales performance process drives accountability. Unfortunately, that can lead to some leaving the business, and we support them through their transition,' a Salesforce spokesperson told CNBC in a statement.
Salesforce had 73,541 employees as of the end of January.
The company said in an August filing that headcount rose 36 percent in the past year 'to meet the higher demand for services from our customers.'
Amazon
Amazon executives are said to be planning to layoff 10,000 people in corporate and technology jobs as early as this week in what would be the largest job cuts in the company's history.
The cuts would focus primarily on Amazon's devices, including voice-assistant Alexa, sources familiar with the discussions told the New York Times, as well as its retail division and human resources.
The move comes as the company reportedly lost $1trillion over the year after its stock plummeted from a high during the pandemic.
If the company goes through with its proposal to cut 10,000 jobs, it would lose about 3 percent of Amazon's corporate employees
The move comes after the company put a hiring freeze in place, affecting major teams including Prime Video, Alexa and Amazon Fresh.
'We're facing an unusual macroeconomic environment, and want to balance our hiring and investments with being thoughtful about this economy,' Beth Galetti, senior vice president of people experience and technology at Amazon, wrote in a memo, which was seen by the Wall Street Journal.
Intel
Intel Corp's CEO Pat Gelsinger told Reuters 'people actions' would be part of a cost-reduction plan.
The chipmaker said recently it would reduce costs by $3 billion in 2023, then ramping that up to $10 billion by 2025.
The adjustments would start in the fourth quarter, Gelsinger said, but did not specify how many employees would be affected.
Some Intel divisions, including the sales and marketing group, could be cut by up to 20 percent, Bloomberg News reported last month, citing people with knowledge of the situation.
Chipmaker Intel is reportedly planning major layoffs, likely numbering in the thousands, in the face of a slowdown in the personal computer market
The company had 113,700 employees as of July, when it slashed its annual sales forecast by $11 billion after missing estimates for second-quarter results.
Intel, based in Santa Clara, California declined to comment on the job cuts when reached by DailyMail.com in October.
Intel has been battered by shifting market trends, including the decline of traditional personal computers as smartphones and tablets rise in popularity.
Last quarter, global PC shipments, including desktops and laptops, declined another 15 percent from a year ago, according to IDC.
Microsoft
Microsoft laid off under 1,000 employees across several divisions last month, according to Axios.
The layoffs represent less than half of 1 percent of the company's 221,000 employees globally, ABC News reported.
But the job cuts affect everything from Microsoft's Xbox console gaming division to its cutting edge Microsoft Strategic Missions and Technology organization.
In a statement, Microsoft executives said: 'Like all companies, we evaluate our business priorities on a regular basis, and make structural adjustments accordingly.
Microsoft laid off under 1,000 employees across several divisions last month, according to Axios
'We will continue to invest in our business and hire in key growth areas in the year ahead.'
Microsoft executives previously announced in July that it was laying off less than 1 percent of its workforce and significantly slow hiring, as its revenue fell short of investor expectations.
The company recorded only $51.9 billion in revenue during the second quarter of the year, but was expected to rake in $52.4 billion.
It had previously recorded blockbuster growth during the COVID pandemic, when consumers and businesses turned to its products as they shifted to a work-from-home model.
Lyft
Ride-hailing firm Lyft said it would lay off 13 percent of its workforce, or about 683 employees, after it already cut 60 jobs earlier this year and froze hiring in September.
Lyft said in a regulatory filing it would likely incur $27 to $32 million in restructuring charges related to the layoffs.
'We are not immune to the realities of inflation and a slowing economy,' Lyft's founders wrote in the memo to staffers.
Ride-hailing firm Lyft said it would lay off 13 percent of its workforce, or about 683 employees, after it already cut 60 jobs earlier this year
The company's share price has fallen 76 percent since the beginning of the year and currently stands at around $10, compared to nearly $45 in January.
Announcing the job cuts in a memo seen by the Wall Street Journal, Lyft founders John Zimmer and Logan Green told staff: 'There are several challenges playing out across the economy.
'We're facing a probable recession sometime in the next year and rideshare insurance costs are going up.
'We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives.
'Still, Lyft has to become leaner, which requires us to part with incredible team members.'
Lyft has about 4,000 employees, not including its drivers.
Apple CEO Tim Cook told CBS Mornings on Monday he plans to freeze hiring
Apple
Though Apple has not yet announced any major layoffs, CEO Tim Cook told CBS Mornings that it is slowing some hiring as well.
'What we're doing as a consequence of being in this period, is we're being very deliberate in our hiring,' he said. 'That means we're continuing to hire, but not everywhere in the company are we hiring.'
At the same time, though, Cook said 'we don't believe you can save your way to prosperity."
'We think you invest your way to it,' he said.