The jobs purge sweeping US tech firms has escalated as Amazon expanded staff-cutting plans to affect more than 18,000 workers and the software maker Salesforce said it would axe 8,000 employees.
The latest cuts follow a wave of redundancy announcements at tech companies in recent months, including 11,000 jobs at Mark Zuckerberg’s Meta, up to 6,000 at the computer maker HP, 3,750 at Twitter and 1,300 at the company behind Snapchat. Amazon’s reductions are the biggest by a big tech firm over the past year and the largest set of layoffs in the company’s history.
The online retailer’s chief executive cited “the uncertain economy” as reason for the move and said Amazon had “hired rapidly over the last several years.” Amazon has more than 1.5 million workers including warehouse staff, making it America’s second-largest private employer after Walmart Inc.
The reductions will bring Amazon’s corporate workforce closer to September 2021 levels, when it told Reuters this headcount numbered around 275,000 people globally. Amazon CEO, Andrew Jassy said Amazon had weathered “difficult economies” in the past and would continue to do so.
“These changes will help us pursue our long-term opportunities with a stronger cost structure.” He said the layoffs would mostly affect the company’s brick-and-mortar stores, which include Amazon Fresh and Amazon Go, and its PXT organisations, which handle human resources and other functions. He did not specify where the affected roles were located, but said Amazon would communicate with employees “or where applicable in Europe, with employee representative bodies”, from 18 January.
The job cuts represent a swift about-turn for the retailer that recently doubled its basic pay ceiling to compete more aggressively for talent. The layoffs amount to 6% of Amazon’s roughly 300,000 person corporate workforce, and equate to about 1.2% of the company’s global workforce of more than 1.5m
Salesforce, meanwhile, said it was laying off about 8,000 employees, or 10% of its workforce. Beniof, the sole chief executive at Salesforce, told employees in a letter that he blamed himself for the layoffs after continuing to hire aggressively in the pandemic, with millions of Americans working from home and demand for the company’s technology surging.
“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Benioff wrote. Salesforce employed about 49,000 people in January 2020, just before the pandemic struck. Salesforce’s workforce today is still 50% larger than before the pandemic.
The CEO of Meta Platforms, Mark Zuckerberg, also acknowledged he misread the revenue gains that Meta, the owner of Facebook and Instagram, was reaping during the pandemic when he announced in November that his company would lay off 11,000 employees, 13% of its workforce. Shares in Tesla have also fallen in the past year owing to a combination of factors, including fears over demand from the Covid-hit Chinese market and its CEO, Elon Musk, being distracted by his $44bn acquisition of Twitter. Apple’s stock has also been hit by concerns about the impact of the Chinese Covid outbreak on its supply chain, with its market capitalisation dipping below $2tn at one point this week.