Amazon is planning to lay off roughly 10,000 employees, according to a new report.
The New York Times (which broke the news) stated the layoffs could begin as early as this week. The company’s retail, human resources, and devices divisions will reportedly take the brunt of it. Amazon had no official comment.
Layoffs in the devices division would impact those technology professionals who work on the company’s voice-activated personal assistant, Alexa, and the hardware supporting it. An earlier report from The Wall Street Journal suggested the devices division “had an operating loss of more than $5 billion a year” in some recent years, despite the popularity of Alexa-powered hardware.
During the pandemic, homebound and isolated consumers used Amazon for an incredible amount of shopping. That, combined with organizations’ use of Amazon Web Services (AWS) for their cloud-based infrastructure, drove enormous profits—and equally enormous hiring. Amazon’s overall headcount grew. In September 2021, then-new Amazon CEO Andy Jassy announced plans to hire 55,000 technologists and corporate employees over next several months.
But even as it prepares to potentially lay off workers, Amazon has moved aggressively in recent months to retain its most valuable technology professionals. In February, it boosted maximum base pay for corporate and technology employees from $160,000 to $350,000. It followed that increase in base pay by handing out “record amounts” of stock, including 138 million restricted stock units to employees in the second quarter of 2022.
Other tech giants, after years of heady profits and accelerated hiring, are taking similar steps. For example, Meta recently announced plans to lay off 11,000 workers. At the same time, though, these companies need to retain the technology professionals who can advance their core strategies. How executives navigate the tension between cost-cutting and the need to hire (and retain) expensive specialists will determine how their companies fare over the next few quarters, if not years.