Amazon, the e-commerce giant, has been facing a lot of criticism and backlash for its recent decision to lay off another 9,000 employees by the end of April 2023. This comes on top of the 18,000 roles the company announced in late 2022, bringing the total number of job losses to 27,000 in less than a year.
Why is Amazon laying off so many workers?
According to the company's CEO Andy Jassy, who took over from Jeff Bezos in July 2020, Amazon overhired people in the past few years and now needs to streamline its costs and headcount in the face of an uncertain economy and lower revenue growth. He also said that the company had to re-prioritize its initiatives based on what customers care about the most, which sometimes led to role reductions or shifts.
How are the employees affected?
The layoffs will mainly affect employees in Amazon's cloud computing unit (AWS), human resources division, advertising and Twitch, which is a live streaming platform for gamers. Jassy said that these were difficult decisions, but ones that he thinks are best for the company in the long term. He also assured that Amazon will support the impacted employees by providing them with separation payments, transitional health insurance benefits and external job placement support.
However, not everyone is convinced by Jassy's explanations or satisfied with Amazon's actions. Many of the laid-off employees have expressed their anger and frustration on social media platforms like LinkedIn and Twitter, accusing the company of being unfair, insensitive and ruthless. Some of them claimed that they were locked out of their systems without prior notice or communication, while others said that they were not given enough time or clarity to find new jobs or opportunities.
What do experts say?
Some analysts and experts have also questioned Amazon's motives and strategies behind the layoffs. They have pointed out that Amazon is still one of the most profitable and valuable companies in the world, with a market capitalization of over $1.7 trillion and a revenue of $386 billion in 2020. They have also noted that Amazon has been expanding its business into new areas like healthcare, grocery delivery, entertainment and space exploration, which require more investment and talent.
Moreover, some critics have argued that Amazon's layoffs are part of a larger trend of tech giants cutting jobs amid fears of recession and economic uncertainty. In March 2023 alone, Meta (formerly Facebook), Accenture and Google have also announced layoffs of 10,000, 19,000 and 8,000 employees respectively. Many of these companies have cited similar reasons as Amazon for their decisions, such as over-hiring, re-prioritization and cost-cutting.
However, some observers have also suggested that these tech giants are using the economic downturn as an excuse to get rid of workers who are not aligned with their vision or culture, or who are demanding better working conditions or rights. They have also highlighted the contrast between the massive layoffs and the huge wealth and power that these tech giants enjoy. For instance, Meta's CEO Mark Zuckerberg has a net worth of over $100 billion, while Amazon's founder, Jeff Bezos has a net worth of over $180 billion.
Worst Hit Departments
Amazon is planning to lay off thousands of employees across several of its business units, according to a report by The Wall Street Journal. The company said that the move is part of a regular review process to streamline its operations and focus on its core priorities. However, some analysts believe that the layoffs are also a sign of increasing pressure from competitors in the cloud computing, online advertising and video gaming markets.
Some of the units that may be affected by the layoffs are:
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AWS: Amazon’s cloud computing arm that provides online services for websites and applications. AWS is one of Amazon’s main sources of revenue and profit growth, but it also faces stiff competition from Microsoft Azure, which has been gaining market share and customers in recent years.
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Advertising: Amazon’s unit that sells ads on its website and other platforms such as IMDb TV and Fire TV. Advertising is another lucrative segment for Amazon, but it also competes with Facebook Ads and Google Ads, which dominate the online advertising market.
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Twitch: Amazon’s platform that allows users to watch live video game streams and chat with other viewers. Twitch is one of the most popular platforms for gamers and streamers, but it also faces competition from YouTube Gaming and Facebook Gaming.
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PXT: Amazon’s unit that works on improving the customer experience for Prime members. Prime is Amazon’s subscription service that offers free shipping, video streaming, music streaming, e-books, gaming and other benefits for an annual fee. Prime has more than 200 million members worldwide, but it also faces challenges from competitors such as Netflix, Spotify, Apple Music and Disney Plus.
Amazon said that it will provide severance packages and career support for the affected employees. The company also said that it will continue to hire for other roles across its businesses. Amazon currently employs more than 1.3 million people globally.
Here is a table with information on recent Amazon layoffs:
|
Month and Year |
Number of Layoffs |
Departments |
|---|---|---|
|
January 2023 |
18,000 |
N/A |
|
March 2023 |
9,000 |
Cloud services, advertising and Twitch livestreaming units. |
Table Source: Amazon Layoffs 2023
Amazon’s Recent Stock Performance
Amazon's recent stock performance has been disappointing for investors and analysts. The company has faced several challenges in 2022 and 2023, such as increased competition, regulatory scrutiny, and customer dissatisfaction. One of the most controversial decisions that Amazon made was to announce layoffs of thousands of workers in its warehouses and delivery services. The company claimed that this was necessary to streamline its operations and reduce costs, but critics argued that it was exploiting its workers and harming the economy. The layoffs also sparked protests and lawsuits from labor unions and human rights groups. As a result, Amazon's stock price has dropped by more than 20% since the beginning of 2022, and its market share has declined in several key segments.
Conclusion
In conclusion, Amazon's layoffs have sparked a lot of controversy and debate among its employees, customers, investors and the public. While the company claims that it is doing what is best for its long-term success and customer satisfaction, many people are questioning its ethics, values and social responsibility. The layoffs also raise broader issues about the role and impact of tech giants in the economy and society, especially during times of crisis and change.