Amazon will cut 18,000 jobs in the biggest round of cuts in its history as big tech companies brace for a global economic slowdown.
Andy Jassy, Amazon’s chief executive, confirmed the scale of the layoffs on Thursday morning, blaming the “uncertain economy” and overhiring during the pandemic.
The online retailer said the jobs would go through its “in-store” business, which includes its online retail division and its brick-and-mortar stores. Digital sales have slowed since Covid restrictions were relaxed, while the company’s recently launched high street stores have failed to break traditional brands’ grip on shoppers.
It will also reduce its internal technology teams. Jassy also confirmed layoffs at her hardware business, which includes her Echo smart speaker set with Alexa and her book division.
Employees will be informed if their jobs are at risk on January 18. The cuts include equipment in Europe, the company said.
Jassy said companies were no longer “in heavy people expansion mode this year” amid economic gloom. He said the company would focus on “simplification” to discover “what matters most to customers.”
In recent years, Amazon has spent billions and hired tens of thousands of people amid a surge in demand for online shopping during the pandemic.
It has also squandered money on innovation, with thousands working on its Alexa artificial intelligence and smart speakers alone. The company expanded into grocery stores, in a challenge to high street stores like Tesco.
However, while Alexa has proven popular with consumers, it has largely failed to recoup its investment on Amazon. The company’s grocery stores have also failed to break the grip of traditional brands on shoppers.
Amazon was among the companies hardest hit by falling tech valuations last year. He dumped $200 billion in a record one-day loss in October after telling the stock market he expected growth to slow.
Amazon employs more than 1.6 million people worldwide, so the job cuts announced Thursday only represent a small fraction of its staff. Most of these are staff in their distribution centers or logistics divisions, including many casual or seasonal workers.
Tech companies have been rapidly changing course after hiring too quickly during the pandemic. Last year, Facebook cut 13% of its staff, while Elon Musk’s Twitter cut its staff by more than half.
Valuations of big tech companies fell last year. Amazon’s share fell roughly 50% in 2022, making it worth around $870 billion.