First Twitter, then Meta, and now apparently Amazon. According to the news that broke out today, the multinational technology company is now reportedly planning to lay off thousands of employees beginning sometime this week.
It is the fall of the giants, some might say. Others might claim it is the financial comeuppance of the formerly untouchable tech field. According to The New York Times, those in the know have called it the largest reduction of staff in the history of one of the Big Five information and technological giants.
10,000 employees to be affected at Amazon
The New York Times has reported that the Amazon layoffs will affect around ten thousand employees. Those at the corporate level and in the technology department would be the most affected.
The reduction of the majority of employees would impact three specific departments, reports have stated. This includes the Human Resources department as well as the retail division and devices organization.
In total, this represents approximately one percent of Jeff Bezos’ workforce globally and only three percent of corporate personnel.
Financial repercussions of the past pandemic
In 2019, the number of those in the Amazon workforce was recorded as being 798,000. By 2021, its manpower had increased to 1.6 million, representing an enormous increase of 102 percent in merely two years.
The pandemic somewhat justified those numbers, however, as Amazon became the most preferred online shopping service in the world. Company profits soared by 220 percent in 2021, making the company a jaw-dropping 185 billion dollars in sales in the first three months of the year.
Likewise, Facebook earned 10.3 billion dollars in the first three months ending on June 30th in 2021 in comparison to 5.2 billion dollars the previous year. In other words, the company doubled its profits.
Elon Musk himself was planning to cut seventy-five percent of his workforce at Twitter this October in order to save on costs and generate more profit.
That increase may have been due to his overoptimism about the continuation of that trend in financial growth, as Mark Zuckerberg stated when announcing the layoff of eleven thousand employees at Meta.
It may also relate to rumors of decreased profit and a weak third quarter last month. Evidently, this scared off one too many investors, meaning shares sunk even further. Their stock is forty-one percent less this year, which financial experts state is a fourteen percent decrease in the S&P 500 (Standard and Poor’s Mean). Standard & Poor’s (S&P) is the leading index provider and data source of independent credit ratings. That makes it the worst annual performance since 2008.
When will layoffs occur?
CNBC astutely pointed out one issue that has people second-guessing Jeff Bezos’ decision—namely, the upcoming holiday season, which has always brought in the greatest amount of profits each year.
As the media network divulged, however, it is all down to Andy Jassy, Amazon’s new CEO. Since taking over the position in July 2021, cutting costs has been one of Jassy’s primary goals. He aimed to save cash when sales were slow with the economy in decline.
As of now, CNBC and The New York Times, amongst other media outlets and news services, have addressed the company’s proposal of a hiring freeze in the retail sector. This follows in the wake of Amazon’s closure of services provided by its Telehealth and the cancelation of its roving delivery robot. The company has also axed some of its brick-and- mortar chains as well as it new warehouse locations. Furthermore, it has discontinued its video-calling projector for kids.
Bezos to give away most of his fortune
Despite the downturn in Amazon’s performance, CNN reported the breaking news this morning that Jeff Bezos plans to give most of his riches to charity, and he intends to do so starting now and for the rest of his life.
The Amazon founder is worth a whopping 124 billion dollars. As he revealed today in an exclusive interview with the U.S. news media giant, the bulk of his wealth will now go to combatting climate change. In addition, Bezos stated that he will help people he believes will aid in generating more unity in a time plagued with social discontentment and conflict.