Tech industry under pressure: Amazon cuts more than 18,000 jobs

The wave of layoffs at the world's largest online retailer Amazon is significantly larger than initially assumed. Group CEO Andy Jassy announced the elimination of more than 18,000 jobs in a memo to employees, as reported by SDA.

Image: / Anirudh.

This is the biggest cutback in the history of the US Internet company, which was founded in 1994. In November, US media had spoken of only 10,000 jobs. Amazon never officially confirmed this figure, but did not deny it either. Instead, Jassy has already hinted that even more employees could be laid off. Amazon most recently employed around 1.5 million people, most of them in the delivery and warehouse infrastructure.

"Amazon has weathered uncertain and uncertain economic times in the past and will continue to do so," said Group CEO Jassy on Thursday night, referring to the challenging economic environment in the face of high inflation and rising key interest rates.

Ordering boom over

He said the management team is aware of how difficult the layoffs are for those affected and does not make such decisions lightly. But the step was necessary to reduce costs. Amazon had already started to cut jobs on a large scale in November. Previously, the company had hired numerous employees due to the order boom during the pandemic. In retrospect, this turned out to be exaggerated.

The wave of layoffs was initially expected to primarily affect the loss-making device division around Echo smart speakers and the Alexa voice assistant program. But Jassy had already prepared employees for further job cuts in mid-November and signaled that there would also be layoffs in the coming year.

The job cuts are now to 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 U.S. financial newspaper "Wall Street Journal" had reported on this in advance, citing insiders.

Tech industry under pressure

Amazon's job cuts are further evidence of the abrupt end to the tech industry's jobs boom. After business flourished during the pandemic, the current market environment, marked by inflation and recession worries, is making life difficult for many companies. Tech stocks are under particularly heavy pressure on the stock market - the Nasdaq sector index fell by 33 percent last year.

Amazon's valuation has actually fallen by almost 50 percent in the past twelve months. The string of companies announcing layoffs is getting longer and longer. For example, Facebook, Whatsapp and Instagram parent Meta, as well as the online network Twitter, which was taken over by Tesla boss Elon Musk, have all announced job cuts. On Wednesday morning, the U.S. software manufacturer Salesforce also announced that it was getting rid of around ten percent of its approximately 79,000 employees.

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