Amazon has reportedly cut several hundred jobs in Seattle, with hundreds of other layoffs in various cities around the United States. This shocking announcement has surprised many people, as Amazon has established itself as a dominant consumer retail business, therefore raising questions as to why these layoffs were made.
Amazon has become a dominant force in the online retail market and has experienced an immense amount of growth within the past decade, specifically within the past few years. Companies like Amazon take pride in frugality, so nobody expected to see such layoffs occur when sales and production are at an all-time high.
According to statements from several Amazon employees through a report from The Seattle Times, the “rapid growth of the last two years left some units over budget and some teams with too much staff for their work [and have] had implemented hiring freezes in recent months across several groups, a move that reduced the company’s open job listings in Seattle to their lowest level in years.”
Amazon did come forth to provide a statement to The Seattle Times: “As part of our annual planning process, we are making head count adjustments across the company — small reductions in a couple of places and aggressive hiring in many others,” a spokesman said. “For affected employees, we work to find roles in the areas where we are hiring.”
Although these layoffs have come as a shock, Amazon is still growing as a company and looking to expand its horizons. These layoffs suggest the company is attempting to consolidate established retail businesses, but this doesn’t mean Amazon is looking to minimize their workforce as a whole. In December, Amazon’s global workforce was near 560,000, which was a 66 percent increase from the prior year. The company is also planning to establish a second headquarters location where it plans to hire up to 50,000 additional workers.
Amazon should be careful with how they approach these new plans, especially with employee morale after these cuts. According to a previous Amazon employee, “It’s a well-loved strategy [to cut employees.]” With current Amazon workers doubting if their jobs are safe, Amazon will need to instill confidence in these employees that their jobs are secure.