Amazon plans to lay off 10,000 workers, according to The New York Times: the labor winter continues to hit Big Tech

These are tough times for Big Tech. So far this November, Twitter has cut half its workforce and Meta has laid off 11,000 workers. The shadow of staff cuts now reaches Amazon as well. The American e-commerce giant is preparing to lay off approximately 10,000 employees, 1% of your workforce, according to The New York Times.

The adjustment, the biggest in Amazon’s 28-year history, would focus on three divisions: devices (which includes Alexa product development), sales and human resources. The company, under the direction of Andy Jassy, ​​would have reached this conclusion after launching a cost optimization plan whose objective would be reduce less profitable divisions.

Amazon prepares for a major cut

During the first months of the pandemic, Amazon experienced tremendous growth. Almost all of the company’s business units began to experience good times. Thus, between 2020 and 2021 it hired a large number of people, raising its workforce to 1.5 million employees. The development, however, was not maintained over time and the numbers were painted in red.

In the third quarter of this year, the company founded by Jeff Bezos experienced its slowest growth rate in two decades, which predicted a likely more grim scenario for the last quarter of the year. The Amazon (AMZN) listing on the stock marketfor his part, fell about 46% in 2022. In November 2021 they were trading in the range of 180 dollars and now they are at 99 dollars.

The truth is that Amazon’s efforts to optimize costs have been around for a long time. In May of this year, it began to reduce the size of its warehouses, closed several of its physical stores and reduced its logistics staff. In addition, earlier this month it announced that it would stop hiring staff in part of its structure. It should be noted that, at the moment, the company has not yet commented.

As we say, the device division, which includes products such as Alexa, Echo, Kinde, among others, would be one of those affected by the staff cuts. Amazon had bet heavily on this division, doubling the existing staff between 2017 and 2018. However, devices in recent years posted significant operating losses thus entering Jassy’s cost optimization plan, says NYT.

The company would have been faced with the following dilemma: continue losing money to improve the voice assistant experience, and thus better compete with other products such as Siri and Google Assistant, or undertake a cut to curb expenses. Apparently, the company would have opted for the latter option. It remains to be seen, then how it will affect the development of new devices and features.

Images: Amazon | Yender Gonzalez