Amazon (AMZN) is preparing to lay off around 10,000 employees as early as this week, The New York Times reported on Monday, citing unnamed sources familiar with the matter.
The layoffs come as the tech industry continues to struggle amid a slowing economy, rising interest rates and stubborn inflation. Facebook’s parent company Meta and Twitter also laid off thousands of employees this month.
The layoffs will impact Amazon’s Alexa business, as well as the company’s retail and human resources divisions, according to the Times. Amazon’s Alexa Group, which produces its Echo hardware and associated software, is losing up to $5 billion a year, the Wall Street Journal reports, citing internal documents reviewed by the newspaper.
The 10,000 jobs represent about 3% of Amazon’s 1.5 million employees worldwide. The Times reports that the final number of planned layoffs could change between now and their announcement. Amazon announced a hiring freeze on November 3.
Amazon has struggled in recent quarters as sales in the company’s retail division slowed from its performance at the height of the pandemic. The company has invested huge sums in building its distribution network, including hiring thousands of employees and building warehouses.
The e-commerce giant has sought to reduce its network of warehouses and rent space inside the facilities. The company also shut down other services, including Amazon Care, its primary healthcare service.
Amazon reported lackluster results in October, missing analysts’ revenue expectations and posting a fourth-quarter forecast that was lower than analysts expected. Amazon shares are down 40% year-to-date.
Amazon joins a growing number of tech companies that have either laid off employees or instituted hiring freezes. Social media giant Meta laid off 11,000 workers last week amid falling ad sales, while Twitter cut 3,700 jobs following the takeover of billionaire Tesla CEO Elon Musk. Snap laid off about 20% of its workforce, while Lyft laid off 683 employees.
Amazon’s Alexa division is designed to entice customers to sign up for the company’s Prime services. Devices include Amazon’s Echo, Echo Dot, Echo Show, and a myriad of home automation products that interact with the voice assistant.
The company has been pouring money into the initiative for years, developing a slew of new gadgets, including Alexa-enabled security cameras and smart glasses that let you access Alexa, make calls, and watch. listen to music.
But e-commerce sales are plummeting as consumers return to physical stores or cut back on spending, forcing Amazon to revamp its business and improve profitability.
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