Amazon to slash more than 18,000 jobs in escalation of cuts

Amazon.com is laying off more than 18,000 employees — a significantly bigger number than previously planned — in the latest sign that a technology slump is deepening.

Chief executive officer Andy Jassy announced the move in a memo to staff on Wednesday, saying it followed the company’s annual planning process. The cuts, which began last year, were expected to affect about 10,000 people. The reduction is concentrated in the firm’s corporate ranks, mostly Amazon’s retail division and human resources functions such as recruiting.

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” he said. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”

Though the prospect of lay-offs has loomed over Amazon for months — the company has acknowledged that it hired too many people during the pandemic — the increasing total suggests the company’s outlook has darkened. It joins other tech giants in making major cuts.

Also on Wednesday, enterprise software company Salesforce announced plans to cut about 10 per cent of its workforce and reduce its real estate holdings. The company said it also hired too many people during the pandemic-fuelled boom and was adjusting to more cautious customer spending.

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The tech industry is slashing jobs at a pace nearing the early days of the COVID-19 pandemic. In November, the most recent month for which data is available, the sector announced 52,771 cuts, for a total of 80,978 this year, according to consulting firm Challenger, Gray & Christmas. It was the highest monthly total for the industry since the firm started keeping data in 2000.

Amazon investors gave a positive reaction to the latest belt-tightening efforts, betting it may bolster profits at the e-commerce company. The shares climbed nearly 2 per cent in late trading after The Wall Street Journal first reported on the plan.

Eliminating 18,000 workers would be the biggest cut yet for tech companies during the current slowdown, but Amazon also has a far bigger workforce than Silicon Valley peers. It had more than 1.5 million employees as of the end of September, meaning the latest cuts would represent about 1 per cent of the workforce.