Amazon Is Laying Off Another 9,000 Workers
To say the tech sector's future is shaky would be an innocent understatement. In fact, the industry is more uncertain than ever, as evidenced by significant layoffs that even the biggest players in the digital age aren't immune to. Adding fuel to the fire is the biggest bank failure since the housing crisis of 2008, courtesy of Silicon Valley Bank, with whom many tech startups and juggernauts entrusted their finances.
Amazon hasn't been immune, as the company entered 2023 facing 18,000 layoffs across its various disciplines, including retail (and the warehousing real estate that supports it), hardware, and internal staffing groups. According to a company memo penned by Amazon CEO Andy Jassy and obtained by CNBC, the company is facing 9,000 more. The new round of layoffs primarily affects Amazon's cloud computing divisions, advertising, and Twitch, the streaming juggernaut it acquired in 2014.
It sounds like the bad news will reach those affected in waves over the coming weeks with a late-April deadline. Amazon is preparing healthy severance packages to help the unfortunate employees throughout their transitions. In the memo, Jassy reminded employees how aggressively it added to its workforce over the past few years, particularly throughout the pandemic. He noted Amazon's desire to operate with leaner efficiency to feel confident facing a future that has become harder to predict. Jassy also apologized to employees for the delayed word on the added cuts, noting Amazon didn't have enough data when it announced the original.
Will this nightmare end?
Amazon isn't alone in what appears to have been an industry-wide overzealous spending spree. Meta recently announced another massive round of layoffs to increase its total to 20,000. Microsoft announced 10,000 cuts of its own earlier this year. Twitter owner Elon Musk infamously predicted this wave as he cut thousands of positions within his newly owned social giant. There are too many other instances to mention, particularly throughout the tech and publishing industries.
Although few could have predicted the lasting economic impact of the pandemic while we were in the midst of it, there was an expectation that the various resulting slowdowns of the world's pipelines and logistical systems would eventually catch up. But there are newer issues that have only exacerbated the issue since, leading to record inflation that has crescendoed into weak consumer spending.
The trickle-down impact has caused many businesses to reconsider previous growth outlooks and maneuver cautiously around universal market uncertainty. For instance, though it's slowed, many expected the briskly climbing federal interest rate to halt or reverse by now. Still, new reports suggest continued hikes to combat the inflation. It's a stark reminder that nothing can grow exponentially forever and that, at some point, market pullbacks and corrections will eventually necessitate new ways to do business. Unfortunately for employees, the first step many businesses take to cauterize these wounds is internal layoffs, and that's simply the nature of the capitalistic beast we all live in.