Unfortunately, it took only five days after the end of 2022 for the “Amazon layoffs 2023” headline to surface. We already know that great tech expansion took a hammering with a layoff spree in 2022 and it seems like tech layoffs will continue in 2023. Amazon CEO Andy Jassy has stated that the corporation will reduce its workforce as the global economic outlook worsens.
“Today, I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles. Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles.”
-Amazon CEO Andy Jassy
Amazon layoffs 2023: What is going on?
Amazon’s layoffs of 18,000 workers are the biggest in the history of the technology sector, which has been actively shrinking since last year. CEO Andy Jassy explained the layoffs in a blog post, blaming the unstable economy and the rapid growth of the company over the past few years. Wage workers in the warehouse will be spared from layoffs. The company’s focus will be on its administrative staff.
Affected employees will begin receiving notices from the corporation starting on January 18th.
According to Jassy, Amazon’s long-term prospects would improve as a result of the layoffs because of the company’s improved ability to control expenses. He acknowledged that the layoffs were a “tough decision” and said, “We don’t take these decisions lightly or underestimate how they could effect the lives of individuals who are impacted.”
In the early stages of the pandemic, Amazon’s sales skyrocketed as people flocked to the website to stock up on necessities. However, this year the business is seeing a decline in demand due to rising prices and a return to in-store purchases.
Jassy tried to put a positive spin on the large layoffs in a blog post announcing them by saying, “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so.” In extended trading, its shares gained 2% after the layoff news.
Inflation at a 40-year high and a global pandemic both contributed to a slowdown in sales last year and Amazon was just the latest Big Tech business to feel the effects.
As consumers revert to their behaviors from before the epidemic and the macroeconomy worsens, many of these previously unstoppable tech companies are now suffering from whiplash and laying off thousands of staff
Amazon will still be paying severance and is required by law to provide certain notices regarding major layoffs.
“We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support.”
-Amazon CEO Andy Jassy
On the same day that Amazon announced its layoffs, commercial software behemoth Salesforce revealed it would be cutting around 10% of its workforce or about 8,000 jobs.
“The pandemic’s boom times made the company hire overzealously. And now that the there has been a pullback in corporate spending, the focus is on cutting costs.”
-Salesforce Co-CEO Mark Benioff
Current Amazon employee count in 2022
You may be wondering how many people will be left when Amazon lays off 18,000 people. Let us remind you that Amazon is one of the largest technology companies in the world.
With over 1.5 million employees (including warehouse workers), Amazon is the second-largest private employer in the United States after Walmart.
Biggest tech layoffs in 2022
Major layoffs have been reported by Facebook owner Meta, Twitter, Snap, and others in recent months, a surprising reversal for a sector that had witnessed huge growth for more than a decade.
These are just some of them:
- Meta layoffs 2022: 11,000 employees
- Snap layoffs 2022: 6,000 employees
- Getir layoffs 2022: 4,480 employees
- Twitter layoffs 2022: 3,700 employees
- Bytedance layoffs 2022: 3600 employees
- Salesforce layoffs 2022: 2,100 employees
- Stripe layoffs 2022:1,100 employees
- Coinbase layoffs 2022: 1,100 employees
- Microsoft layoffs 2022: 1,000 employees
- Netflix layoffs 2022: 450 employees
- Tesla layoffs 2022: 229 employees
It is important to take precautions, and layoffs are not the only option. It’s terrible news for the industry overall that some businesses have halted or stopped hiring. These are the tech companies that have slowed or frozen hiring in 2022:
The tech industry has lost almost 150,000 jobs since 2022. For detailed information about tech layoffs in 2022, go to our report.
Will tech layoffs continue?
For Amazon, the epidemic was a major benefit to its economic line, with online sales surging as consumers avoided in-store shopping and the need for cloud storage expanded with more businesses and governments transferring activities online. And it has resulted in Amazon adding hundreds of thousands of jobs over the course of the last few years. Now, the effects of the pandemic are waning and the emerging economic crises are forcing even the largest tech companies, including Amazon, to downsize.
Over the past ten years, tech companies have experienced rapid expansion and exorbitant spending. However, given the impending global recession, which might be significantly longer and harsher than many think, Silicon Valley companies that announced large layoffs this week could be a leading indicator for the economy.
Tech companies may need to slow down their recent expansion and spending boom in favor of cost-cutting measures when possible due to the changing economic climate.