The cold winter of the tech world: After Meta, Amazon will lay off 10,000 employees this week

Within weeks, tens of thousands of people in the tech world lost their jobs.

According to CNBC, Amazon is planning to lay off about 10,000 employees in the technology and corporate governance areas starting this week.

Amazon shares closed down about 2% in trading on Monday.

According to the report, this cut will be the largest in the company’s history and will primarily affect the equipment, retail and human resources segments. The layoffs would represent less than 1% of Amazon’s global workforce (including hourly workers) and about 3% of the company’s direct employees.

The news of Amazon’s layoffs comes at a time when a series of other technology companies have also laid off thousands of employees. Meta announced last week that it would be laying off more than 13% of its employees, or more than 11,000 people, and Twitter laid off about half of its workforce within days of Elon Musk’s acquisition of the company. $44 billion.

Amazon reported 798,000 employees at the end of 2019 but had 1.6 million full-time and part-time employees as of December 31, 2021, a 102% increase. The New York Times reported that Amazon is still weighing the total number of layoffs, which are “variable” and subject to change.

A representative from Amazon did not respond to a request for comment.

The year-end shopping season is very important to Amazon and is often the time when the company has to increase headcount to keep up with demand. But Andy Jassy, ​​who took over as CEO in July 2021, is focusing on cutting costs to preserve cash. This comes as the company faces slowing sales and a bleak global economy.

The company has announced plans to stop hiring for positions within its retail business.

In recent months, Amazon has shut down its telehealth service, stopped making projectors for children, closed all but one of its call centers in the US, eliminated delivery robots moving stores, closing inefficient brick-and-mortar chains, and closing, canceling or delaying some new warehouse locations.

Amazon reported disappointing third-quarter sales in October that spooked investors and sent the stock down more than 13%. This marks the first time Amazon’s market capitalization has fallen below $1 trillion since April 2020.

It’s also the second report this year to show Amazon’s bad results, triggering a double-digit stock sell-off rate. The sell-off continued for days after the report was released and blew away almost all of the capitalization gained during the pandemic.

In fact, tech leaders, after years of trying to thicken their recruiting portfolio, are turning to a sad message: Sorry, we’ve grown too fast.

This message partly reflects the CEO’s shock at the sharp downturn in the technology sector. For some executives, it’s the first time they’ve seen a recession so bad.

In the past, seeing a sharp increase in the number of online users during the COVID-19 lockdown, technology companies rushed to accelerate the recruitment process to take advantage of opportunities and accumulate talent.

In it, Zuckerberg increased the number of employees by 80% since the pandemic began to about 87,000 employees. Alphabet, Google’s parent company, added nearly 68,000 employees, an increase of about 57% compared to the previous year. Meanwhile, the number of Twitter employees more than doubled after 2 years of COVID-19. Twilio also tripled its staff to 8,992 people.

With the lockdown lifted, demand for everything from digital advertising to memory chips has plummeted. Consumers revert to old habits, adding to the burden on the long-term economic outlook. The tech-focused Nasdaq index is down more than 30% this year.

“Tech companies make a lot of money. They don’t want to lose any race. Then the party suddenly stopped,” commented Jeff Hunter, CEO of Talentism.

When the pandemic broke out, online retailers like Amazon became a savior as many people relied on it to make purchases while stuck. This prompted Amazon to double its workforce to about 1.5 million, while opening hundreds of new warehouses, sorting centers, and other logistics facilities to meet demand. This giant’s profits nearly tripled.

However, recently, Amazon is having to re-establish business after witnessing the worst period in its history.

The layoffs reflect in part an effort to re-evaluate the business of technology companies, according to John Chambers, a technology investor. “Growth covers a lot of mistakes. 12 years of continuous development means that we will have to make trade-offs.”

“When you’re in growth mode, it’s hard to focus on the adjustments you’re supposed to make,” said Sundar Pichai, CEO of Google. “This moment gave us an opportunity,” he said.