This represents the largest staff reduction in the company's history.
The latest update from sources, who requested anonymity because they were not authorized to speak publicly, included that the employees who will be laid off will receive a 24-hour notice and severance pay in accordance with their company contracts.
"There is a sense of fear among employees in the company as the news has come out," a corporate staff who was told directly about the layoff effort revealed. "There is no specific department or location mentioned for the cuts; it is across the business."
The retail company allegedly cited the wrong manpower forecast and hiring spree during the Wuhan coronavirus (COVID-19) pandemic as the cause of the mass layoff.
According to the New York Times, the cuts will focus on the online shopping giant's devices organization, including the voice assistant Alexa, as well as on its retail division and human resources. (Related: Amazon to fire 10,000 employees in biggest layoff in company's history.)
The unnamed sources also disclosed that the employees were ranked from level 1 to level 7, and staff at all levels will likely be affected. They also said that managers were instructed to identify work performance problems among employees as part of the retrenchment effort. Twenty thousand workers are the equivalent of about six percent of corporate staff and about 1.3 percent of the company's 1.5 million workforce, which includes the global distribution center and hourly workers.
Amazon CEO Andy Jassy responded to the initial report of the news portal, confirming in a statement to employees that layoffs are in the works but did not specify the planned number of employees to be laid off.
"Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments. Those decisions will be shared with impacted employees and organizations early in 2023," Jassy said.
When asked if the 20,000-staff reduction is true, a spokesperson of the firm pointed to a part in Jassy's November 17 message that read: "We haven't concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organizations), but each leader will communicate to their respective teams when we have the details nailed down."
Recession woes haunt Big Tech sector
Apart from Amazon, various Big Tech companies have already started firing employees back in October as they prepare for an expected economic recession. This has been the highest retrenchment figure since February 2021.
Meta CEO Mark Zuckerberg recently announced a huge layoff, admitting to his employees that he "got it wrong" and that he "takes responsibility" for the problems that led to the cuts, which made up around 11,000 jobs or 13 percent of its workforce. Twitter's Elon Musk also went on to terminate top executives and let go of 3,000 employees in the microblogging company during the first days of his takeover. Some left independently, while others were forced out.
The other firms that announced job cuts are:
- DoorDash – 1,250 employees
- AMC Networks – 1,700 employees
- Microsoft – around 1,000 employees
- Lyft – around 700 employees
- Stripe Payments – 1,100 employees
- Seagate Technology – 3,000 employees
- Cisco Systems – 4,100 employees
- HP – 6,000 employees
Meanwhile, analysts are saying that the mass layoff rounds in the tech industry are a telling signal or barometer of what's happening in President Joe Biden's job economy and how he, as the country's top executive, deals with the inflation and interest rate hikes.
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