Amazon is set to start firing up to 18,000 employees from today, according to a statement Neowin reported on earlier this month. The sackings were originally going to be revealed today but leaks went out to the press so CEO Andy Jassy decided to comment on the matter officially ahead of the planned layoffs.
Jassy said that the 18,000 job cuts would affect several teams but those most affected would be the Amazon Stores and People Experience and Technology (PXT) Solutions teams. With higher interest rates hitting people and businesses, companies like Amazon are seeing lower revenues and tumbling share prices. To bolster investor confidence, companies refocus their efforts on profitable efforts and let go of workers in the less profitable areas of the business.
The higher interest rates also pose another problem for companies, credit is now more expensive to acquire. For the last decade, since the last recession, interest rates have been very low and this has meant startups flourished and bigger firms like Amazon could spend money on more experimental, but unprofitable, activities. The increase in the price of credit is putting an end to this type of activity and people in those fields are feeling the brunt. With them having less money in their pocket, demand for goods will fall and inflation should come back down around the 2% target.
According to the statement issued previously, Amazon employees based in the US are going to be spoken to directly while in Europe, Amazon will go through employee representative bodies. Last year, it was expected that 10,000 jobs would be cut but the numbers were almost doubled to 18,000 since. Amazon is not the only company looking to cut swathes of employees either, this morning it was reported that Microsoft is also looking to cut 10,000 jobs today.
“To those impacted by these reductions, I want you to know how grateful I am for your contributions to Amazon, and the work you have done on behalf of customers,” Andy Jassy said in his statement earlier this month. “You have made a meaningful difference in a lot of customers’ lives. To those who will continue on the journey with us, I look forward to partnering with you to keep making life better and easier for customers every day and relentlessly inventing to do so.”
While it’s not good news for the affected employees who are likely seeing mortgages, rents, and bills rising, some data issued by ZipRecruiter in December revealed that 79% of tech workers who were fired managed to find new employment within three months. It’s not clear if it will remain this easy to find work in the coming months, though. Amazon, for example, has drastically cut job openings since last May.