When the pandemic hit in 2020, most global corporations got caught flat-footed. Amazon meanwhile, kept on growing, becoming much more massive. Even in the face of supply chain slowdowns, a tight labor market, and Covid-19 outbreaks in its facilities, the pandemic produced Amazon’s most profitable era on record, all while the tech giant doubled its workforce. Unfortunately, by earlier this year, the bullwhip of the pandemic had snapped, and Amazon’s growth slowed to the lowest rate in two decades.
Gradually, the company began feeling the brunt of high costs from decisions to overinvest and rapidly expand, all while changes in shopping habits and high inflation dented sales. Alas, after recently fighting to retain its workforce (while also battling to stop them from unionizing), Amazon has become the latest technology company to lay off workers — thousands of them. The e-commerce giant plans to cut around 10,000 jobs, the largest ever headcount reduction in its history, according to people familiar with the matter.
The hearsay surfaced just a few weeks after talk on the company possibly freezing staffing levels in its profitable advertising business. “The layoffs, which could begin as soon as this week, will likely target Amazon’s devices group, responsible for the Echo smart speakers and Alexa digital assistant, as well as Amazon’s retail divisions and human resources,” a Bloomberg report indicated.
Amazon saw this coming?
Truth be told, experts have long believed that devices and Alexa have long been seen internally as being at risk for cuts. Alexa and related devices rocketed to a top company priority as Amazon raced to create the leading voice assistant, which leaders thought could succeed mobile phones as the next essential consumer interface. Between 2017 to 2018 alone, Amazon doubled staff on Alexa and Echo devices to 10,000 engineers.
Some longtime Amazon employees, also speaking on condition of anonymity to discuss an internal matter, according to Bloomberg, said the cost-cutting in the last few months has been the most severe they’ve ever experienced. Prior to this, chief executive officer Andy Jassy had vowed to streamline operations amid slowing sales growth and economic uncertainty.
The Seattle-based company had even predicted that the holiday sales period would be the slowest in its history. Amazon has spent much of this year adjusting to a sharp slowdown in e-commerce growth as shoppers resumed their pre-pandemic habits. Amazon delayed warehouse openings and froze hiring in its retail group before broadening the freeze across the company’s corporate groups.
Amazon had even shuttered teams working on a telehealth service, a delivery robot and a childrens’ video-calling device, among other projects. Up till the end of September, Amazon employed 1.54 million people, with the vast majority consisting of hourly employees who pack and ship items in warehouses or work in Whole Foods Market and other retail stores.