Amazon also cuts 18,000 jobs in 'harsh layoffs'

Big Tech Faces 'Employment Freeze' Amid Global Economic Recession

[Asia Economy Reporter Haeyoung Kwon] As global economic uncertainties accelerate, Amazon, the world's largest e-commerce company, is cutting 18,000 jobs, far more than initially expected.

Amazon Cuts 18,000 Jobs

On the 4th (local time), The Wall Street Journal (WSJ) reported that Amazon, after cutting thousands of jobs last year, will undertake a large-scale layoff within a few weeks.

Earlier, Amazon announced in November last year that it had begun workforce reductions focusing on its device business, hiring, and retail operations divisions. At that time, WSJ reported that 10,000 employees would be laid off, but the total number of layoffs, including the thousands who left the company last year, is expected to exceed 18,000. This accounts for 1.2% of Amazon's total workforce of 1.5 million as of September last year.

After the COVID-19 pandemic, online shopping surged, prompting Amazon to expand its logistics network and hire millions of new employees. However, as countries moved toward 'With Corona' policies and offline shopping surged, Amazon ultimately decided to downsize to reduce costs.

Andy Jassy, CEO, explained, "Amazon has overcome uncertainties and economic difficulties in the past and will continue to do so," adding, "A significant portion of the layoffs will occur in the retail and hiring-related organizations." He said, "During my one and a half years as CEO, this layoff decision was the most difficult," and added, "There is a need for additional layoffs, which will continue through 2023."

Employment Indicators Remain Strong, but Job Market Freezes Centered on Big Tech

Following Amazon, Salesforce, the world's largest customer relationship management (CRM) software company, also announced plans to lay off 10% of its entire workforce. Some regional offices will be downsized. This decision for additional layoffs came just months after laying off about 1,000 employees in November last year.

As global recession warnings grow this year, restructuring centered on big tech continues from the end of last year into the new year. According to 'Layoffs.fyi,' a site tracking IT company layoffs, 1,018 companies worldwide cut a total of 153,678 jobs last year. Meta Platforms laid off 11,000 employees, while Cisco (4,100), Twitter (3,700), and Better.com (3,000) also reduced their workforce.

Although employment indicators in the U.S. remain robust, the big tech job market is rapidly freezing. Dan Ives, an analyst at Wedbush Securities, said, "In a situation where a recession is imminent, tech companies that have overbuilt their organizations over the past few years are moving to maintain profits amid uncertain conditions."

Not only big tech but also Wall Street investment banks (IB) and manufacturing have not escaped the wave of layoffs. Goldman Sachs plans a large-scale workforce reduction this month following layoffs of hundreds last September. It is estimated that up to 4,000 employees, or 8% of the company's total workforce, could lose their jobs. Earlier, Citigroup and Barclays conducted layoffs, and Morgan Stanley announced plans to lay off 1,600 employees, about 2% of its total workforce, earlier this month. U.S. semiconductor company Micron also announced plans to cut 10% of its workforce due to increased inventory caused by decreased demand.

This content was produced with the assistance of AI translation services.