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Amazon plans to lay off over 18,000

Posted January. 06, 2023 07:47,   

Updated January. 06, 2023 07:47


Amazon, the largest e-commerce company in the U.S., will cut over 18,000 jobs, up from 10,000 employees initially planned to be laid off last November, in what would be the largest job cuts not only in the company’s history but also industry-wide in the past year.

In a blog post, Amazon CEO Andy Jassy wrote that the company made a difficult decision to eliminate over 18,000 employees, most of which will be in Amazon Stores and PXT organizations. “These changes will help us pursue our long-term opportunities with a stronger cost structure,” Mr. Jassy said. “We intend on communicating with impacted employees starting on January 18.” The Wall Street Journal analyzed that the cuts amount to 5 percent of Amazon’s corporate workforce.

As Covid-19 drove an online shopping surge, Amazon’s profit also soared. However, the company’s earnings floundered, and fourth-quarter guidance came in lower than expected as customers returned to offline stores with the loosening of COVID-19 restrictions, along with a change in macroeconomic conditions, including the U.S. Federal Reserve’s interest rate hike.

U.S. software company Salesforce announced that it would cut approximately 10 percent of its workforce and reduce its real estate footprint. “The environment remains challenging, and our customers are taking a more measured approach to their purchasing decisions,” Salesforce’s CEO Marc Benioff said in a letter to employees.

However, despite layoffs made by major tech companies, U.S. employers are still hiring briskly. According to the Department of Labor, the number of job openings in Nov. 2022 totaled 10.46 million, higher than the Wall Street estimate (10 million), thanks to an increase in job openings as the nation moves to a post-pandemic era, with customers spending more on services, including dining out and traveling.

Hyoun-Soo Kim kimhs@donga.com