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Amazon may follow Twitter, Meta, Netflix in reducing jobs: Report

Amazon may follow Twitter, Meta, Netflix in reducing jobs: Report
Photo Credit: 123RF.com
11 Nov, 2022
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An unexpected slowdown in predicted growth in markets, especially in advertising and retail, has pushed global technology majors into a phase of mass layoffs after a sustained phase of growth through the Covid-19 pandemic. Now, hot on the heels of the likes of Netflix, Twitter and Meta, e-commerce giant Amazon could become the next initiative that seeks to reduce jobs and find “opportunities to optimise costs”, said a report by The Wall Street Journal on Thursday. 

The Andy Jassy-led company is reportedly looking at its Alexa smart assistant division, which employs over 10,000 individuals, as one of the biggest cost centres that may see the workforce slashed and re-evaluated. According to the WSJ report, Amazon’s Alexa division registers as much as $5 billion in net loss per year “in recent years”. 

A statement from a company spokesperson to WSJ said, “Our senior leadership team regularly reviews our investment outlook and financial performance, including as part of our annual operating plan review. As part of this year’s review, we’re of course taking into account the current macro-environment and considering opportunities to optimise costs.” 

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At the moment, it remains unclear as to how the company will handle its layoffs. The WSJ report further stated that employees in other business divisions were being asked to look for openings in other teams under the Amazon umbrella since the former divisions were being suspended or shuttered. However, it isn’t clear as to which of these divisions are being closed. 

Amazon’s move comes in continuity to the likes of Twitter and Meta, which have been notably at the forefront of cutting down a large number of jobs. Twitter, which had around 7,500 employees globally as of last month, has reportedly reduced its workforce by nearly 50%. On November 4, Mint reported that the company let go of all but less than 10 members of it up to 250-member India staff. Company filings accessed by Mint on Friday noted Twitter’s India employee expenses to have risen three-fold in FY22 — as it established an engineering division last year and sought to expand its operations. 

Meta, on Wednesday, said through a blog post by chief executive Mark Zuckerberg that it will be laying off 13% of its workforce — amounting to 11,000 individuals — as it re-evaluates its businesses and cuts losses. In the post, Zuckerberg said that he, like the rest of the industry, wrongly expected an inflated growth pace in ecommerce and digital advertising to continue in a post-pandemic world — figures that have since returned to 2019 levels. 

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This has left tech companies clutching at straws, after the two pandemic years saw the companies expand rapidly in order to cash in on the inflated demand. In the past two weeks, all big tech stocks on the New York Stock Exchange, barring Apple, lost over 5% of their market capitalisation value after reporting declining revenue in their September quarter earnings.