The pink slips have begun flying at Amazon, as the tech and e-commerce giant let loose with its latest round of layoffs, according to a memo to employees on Wednesday, in a decision that sweeps upward of 18,000 people across the U.S., Canada and Costa Rica out the door.
Aimed at reducing costs and trimming headcount, the job cuts target its Stores division, which covers both physical and e-commerce workers, as well as human resources.
The move follows through on comments made by Andy Jassy in early January, when the Amazon chief executive officer confirmed reports that a massive round of job cuts were in the works. Indeed, this latest round of layoffs — aimed primarily at the company’s Stores division and human resources staff — amount to the largest in its history.
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At the time, the CEO issued a memo and posted on the blog that “we typically wait to communicate about these outcomes until we can speak with the people who are directly impacted. However, because one of our teammates leaked this information externally, we decided it was better to share this news earlier so you can hear the details directly from me.”
Other memos distributed internally this week to announce the “role reductions” blamed the ongoing ripple effects stemming from the pandemic.
“WW Stores Team, I want to send a note that today we will be notifying employees impacted by our decision to reduce our Amazon WW stores corporate headcount….The exit out of COVID-19 this past year was challenging, with labor shortages, supply chain difficulties, inflation and productivity overhang from growing our fulfillment and transportation networks so substantially during the pandemic, all of which increased our cost to serve,” wrote Doug Herrington, Amazon’s global retail chief.
“As we head into 2023, we remain in uncertain economic times. Therefore, we’ve determined that we need to take further steps to improve our cost structure.”
The effort to streamline the operation includes bolstering logistics and fulfillment, including a keener focus on local inventory and shipment consolidations, among other things.
According to Herrington, severance packages will include 60 days of full pay and benefits, with additional weeks pegged to the employee’s tenure with the company, as well as a “separation payment,” other transitional benefits and job placement assistance.
Another note from Beth Galetti, who runs human resources at Amazon, explains that country-specific info sessions will be available for those affected in the U.S. and Canada, while it will work out processes in other regions according to local guidelines or regulations.
Notably, after confirming that messages were sent to employees in the U.S., Canada and Costa Rica, she said workers in China will be notified after the Chinese New Year, indicating that this round of job cuts has only just begun.
Amazon is the latest employer in the tech and retail sectors to whittle down staffing recently, as waves of companies from Walmart, which dropped 200 corporate employees, to Microsoft, which just cut as many as 10,000 people from its ranks, reduce their workforces in the face of ongoing macroeconomic and inflationary uncertainties. At Stitch Fix, an enormous round of layoffs gutted 20 percent of its staff in January, as revealed alongside the news that CEO Elizabeth Spaulding was stepping down.
The upside of this is that savvy companies looking for tech talent or retail expertise may suddenly have an embarrassment of recruitment riches on their hands — assuming, of course, their businesses are healthy and somehow hardened against whatever economic headwinds are in store. On the ground, however, the burgeoning ranks of the newly unemployed look poised to feed a broader belt-tightening among consumers.