Amazon laid off some devices unit staff as it targets 10,000 cuts

November 16 (Reuters) – Amazon.com Inc. (AMZN.O) said on Wednesday it laid off some employees in its device group, with a person familiar with the company saying it was still targeting around 10,000 job cuts, including in its retail division and human resources.

The announcement, Amazon’s first since news outlets including Reuters announced its layoff plans on Monday, heralded a sea change for a company known for job creation and added shape to the latest layoffs that have hit the tech sector.

Amazon executive Dave Limp in a blog post said the company decided to consolidate Teams into its device unit, which popularized speakers that consumers can speak to. He informed employees that he cut on Tuesday.

“We continue to face an unusual and uncertain macroeconomic environment,” he said. “In light of this, we have been working over the past few months to prioritize what matters most to our customers and the business. »

Plans, still ongoing, to eliminate about 10,000 positions through cuts in more units would represent a reduction of about 3% of Amazon’s workforce of about 300,000 people.

For years, the online retailer aimed to make Alexa, the voice assistant that powers the gadgets it sells, ubiquitous and present to place any order, though it was unclear to what extent the users have adopted it for more complex tasks than checking the news or the weather. .

A project inspired by a talking computer in the sci-fi show Star Trek, Alexa had attracted a workforce that grew to 10,000 in 2019.

At the time, Amazon boasted sales of over 100 million Alexa devices, a figure it hasn’t publicly updated since. Founder Jeff Bezos later said the company often sells Alexa devices at a discount and sometimes below cost.

While Amazon has worked hard to code smart answers to all the questions Alexa might expect from users, Alphabet Inc. (GOOGL.O) Google and Microsoft Corp. (MSFT.O)OpenAI, backed by OpenAI, made breakthroughs in chatbots that could react like a human without any handshakes.

Following the announcement of the layoffs, stocks pared losses and fell about 1% on Wednesday afternoon.

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The news follows Facebook’s parent company, Meta Platforms Inc. (META.O) announces last week to cut 11,000 jobs, in addition to layoffs at Twitter Inc, Microsoft, Snap Inc (SNAP.N) and others.

For Amazon, the cuts stand in stark contrast to efforts months ago to double its base salary cap to compete more aggressively for talent.

By September last year, it had marketed 55,000 corporate positions globally at a job fair, an increase eclipsed only by hiring at Amazon’s fulfillment centers. In a short time, the online bookseller that Bezos envisioned on a road trip no more than 30 years earlier had become America’s second-largest private employer, with more than 1.5 million workers, including warehouse staff.

The turn was brutal. The retailer is now reacting to sales that could rise by just 2% this holiday season, compared to a 38% increase two years ago. Amazon’s chief financial officer told reporters last month that consumers had tighter budgets in the face of inflation and rising fuel costs.

Its cloud computing division, a profit engine for the company, also grew revenue more slowly quarter after quarter over the past year, after adjusting for exchange rates.

Andy Jassy, ​​who took over as CEO in 2021, has focused on cutting costs and stemming Amazon’s 42% share price decline this year to date.

Under his tenure, Amazon announced the end of its virtual health service for employers and the pruning of its highly publicized stand-alone curbside delivery program. It also froze additional hiring at companies.

Reporting by Jeffrey Dastin in Palo Alto, California and Aditya Soni in Bengaluru; Editing by Arun Koyyur, Mark Porter and Josie Kao

Our standards: The Thomson Reuters Trust Principles.

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