Amazon may lay off up to 20,000 employees to streamline costs: Report

Following a hiring spree during the pandemic, Amazon may now lay off 20,000 employees in the coming months across various departments. Employees from all the rankings in the company, from Grades 1 to 7, are expected to be affected by the layoffs, a report by Computerworld said.

In November, the New York Times (NYT) reported that Amazon may lay off up to 10,000 employees.

In the last few days, the company has reportedly asked the managers to identify employee performance problems. 20,000 employees would amount to nearly 1.3 per cent of Amazon’s total workforce of 1.5 million globally. This includes non-permanent workers too.

Business Standard could not independently verify the report.

Amazon’s employees will receive a 24-hour notice and severance pay if they were laid off. It would be the largest layoff in the company’s history.

“There is no specific department or location mentioned for the cuts; it is across the business. We were told this is as a result of over-hiring during the pandemic and the need for cost-cutting as the company’s financials have been on a declining trend,” a source told Computerworld.

On November 17, Amazon CEO Andy Jassy wrote a message to the employees, confirming that layoffs were taking place. He did not, however, specify the number of employees being laid off.

“This year’s review is more difficult due to the fact that the economy remains in a challenging spot and we’ve hired rapidly the last several years,” Jassy wrote.

“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. And, as has been the case this week, we will prioritize communicating directly with impacted employees before making broad public or internal announcements,” he added.

“We are working to support those who are affected and trying to help them find new roles on teams that have a need; and in cases where that’s not possible, we are offering packages that include a separation payment, transitional health insurance benefits, and external job placement support,” the letter further read.

Speaking at the NYT DealBook Summit on November 30, Jassy defended the mass layoffs and said, “We just felt like we needed to streamline our costs”.