Following Twitter and Meta, Amazon is set to lay off thousands of employees. The company is moving towards cost-cutting measures after the company has not been profitable for the past several months.
The company told local authorities in California on Tuesday that it will lay off about 260 workers at various firms that employ data scientists, software engineers and other corporate workers. Those job cuts will take effect on January 17.
The company says it will provide 60 days' notice to employees if they have 75 or more full-time or part-time jobs at the company. Amazon employs more than 1.5 million workers globally, primarily made up of hourly workers.
Similar to other internet and social media behemoths, the online retail behemoth saw significant revenues during the COVID-19 pandemic as homebound buyers increased their online shopping. But when the pandemic's worst symptoms subsided and customers turned less and less to online shopping, revenue growth slowed down.
Online retailer Amazon reported a loss for the third consecutive quarter, but investors were gloomy about its weaker-than-expected revenue and projections for the current quarter. The Seattle-based company reported two consecutive losses this year, driven mainly by write-downs of the value of its stock investment in electric vehicle start-up Rivian Automotive. Analysts had forecast a profit for the holiday season, which is typically good for retailers due to the holiday shopping season.
Amazon is preparing for what could be a slower growth period and will be careful about hiring in the near future. The company has already been axing some of its projects including subsidiary fabric.com and home delivery robot Scout. Its also been scaling back its physical footprint by delaying — or canceling — plans to occupy some new warehouses across the country.
Mass layoffs are rare at Amazon, but the company has had rounds of job cuts in 2018 and in 2001 during the dot-com crash. The company announced earlier this month that it would pause hiring among its corporate workforce.
But some say they were let go on Tuesday, according to posts on LinkedIn. Some of those laid off worked for Amazon's voice assistant Alexa and cloud gaming platform, Amazon Luna.
The company says the changes are due to the current macro-economic environment and rapid hiring. "Some teams are making adjustments, which in some cases means certain roles are no longer necessary," Amazon says.
The company will work with them to "provide support," including assistance in finding new roles. If an employee cannot find a new role within the company, Amazon will provide a severance payment and other benefits.
The news follows similar announcements from Facebook, Twitter and other tech giants in the past few weeks.
Analyst Daniel Ives said he believes Amazon will likely sustain its workforce and investments in profitable areas like cloud computing, while trimming costs in non-strategic areas.
"The clock has struck midnight in terms of hyper-growth for Big Tech," Ives said. “These companies hired at such an eye popping rate, it was not sustainable. Now there's some painful steps ahead.”