Amazon is said to plan to lay off thousands of employees
nytimes.com
nytimes.com
> The pandemic produced Amazon’s most profitable era on record ... Amazon doubled its work force in two years, and funneled its winnings into expansion and experimentation to find the next big things.
So it doubled its head count in the past 3 years and is now trimming by 3% (or 1% of global).
Update: Tried to figure out whether the doubling head count was corporate employees or total. I don't have time to dig into it now but a quick search did turn up Amazon's EEO reports in which they break employees down into a number of categories including "Professionals" -- which sounds like it would include engineers. 77K in 2019, 121K in 2021. So it's reasonable to assume those did double from 2019 to the present. See https://www.aboutamazon.com/news/workplace/our-workforce-dat...
It was newsworthy because of the potential devastation these events would have had on an area; as in some people may never be employed _ever again_.
It's why Ireland gave so many tax breaks to Apple; they employed thousands from one city. Layoffs would have made an already bad situation far worse.
Also: "Amazon froze hiring in several smaller teams in September. In October, it stopped filling more than 10,000 open roles in its core retail business. Two weeks ago, it froze corporate hiring across the company, including its cloud computing division, for the next few months."
And clarify the difference between skilled and unskilled labor (which might make this make more sense), this is not a description of the work itself, but rather the barrier of entry. Anyone can be taken off the street and trained into an "unskilled" position with relative ease. That is not true for "skilled" positions though. Which is why Amazon's decision to start cutting corporate jobs represents a fundamental shift in their path going forward.
I have worked at a few firms that have done this, and I have heard from a few people their managers arbitrarily picked them to get knocked into a lower tier.
Conversely, if they hired a big cohort of bozos one year, you know they would never say, "We would like to get rid of 15%, but our plan is only to get rid of 10%." They would have no problem going beyond 10%.
It is if made overnight!
Same with Apple, to be fair. Apple retail may employ more than Apple corporate.
$5B loss from one business line is a lot. Maybe this manner of investment inspired Zuck on the metaverse.
Why would a 2022 article be citing a 2018 loss figure for a almost surely (if my house is any indication) fast-growing segment?
You could think of reporting on selective leaks like this as kind of a needling for Amazon to release more up-to-date info.
All of which is to say that a $5B loss is a very material number. They obviously thought it would be a big profit driver in the future, which it has not turned out to be yet.
Do they sell the devices at a profit?
Does usage of the devices lead to increased sales on Amazon.com? Are those sales that wouldn't have taken place on the app/website otherwise?
The devices listen for their wake word before ever transmitting data to the cloud. (This is also because the sheer amount of bandwidth needed for always-on would be un-economical even for Amazon).
No clear idea what that data is, though. There's at least a small chance it isn't benign.
As/when it's put on my institution's open repository I'll post a link. Might be a few weeks though.
Hell, don't even send the sound, just send a weekly report of events.
While absence is hard to prove, an intentional or unintentional data collection beyond what is stated in their policies is highly unlikely.
(I say "was" because they recently rolled part of it out as a Prime benefit a couple of weeks ago, but I can't figure out the exact difference between unlimited and what's included in Prime [and don't care enough to chase it down], but they are still offering a $9/mo unlimited offering, so there must be some difference.)
A massive limitation for some people, but it fits my usage.
It was perfect timing for me. Google just massively raised their prices for Youtube family so I was looking for alternatives.
You can only play in shuffle mode.
I'd imagine like any other new product, they're taking a risk and hoping the product takes off with higher adoption so they can earn more. The bet on Alexa always seemed to be that people wanted a hands-off, voice powered way to interact with the internet, and perhaps they could charge for skills (creating their own 'app store') at some point, or earn more on selling products on Amazon because people would enjoy the convenience of just asking their device to buy more detergent or whatever. Not sure I ever really got the premise here, because it was always quite easy to order stuff on my computer or phone.
Anyway, I don't work at Amazon so I'm not sure if I'm mistaken about what the idea was. I imagine only some people close to that division would really know.
Eventually people will say "Alexa buy my groceries"
Alexa will buy from the highest bidder
But for what it's worth, I think there's a conflict of interest here. No one is going to believe that Amazon won't prioritize Fresh or Whole Foods for these orders - even if they don't.
If I tell Alexa to order ketchup, who knows what brand I'll get or what size? It's possible I might end up with banana ketchup or even mayonnaise given how poorly Amazon's search functions work.
No reason why Amazon can't do something similar. They only need it to be "good enough" that people start getting used to not always needing to ask for it to list what is in the upcoming order.
"Alexa, put that on my shopping list" directs spending to Amazon in lieu of whatever the local alternative would have been.
That seems reasonable. Customers can order directly through the device ("Alexa, order some toilet paper"), that's low friction and lets Amazon rank options to their benefit. Plus regularly using Alexa keeps Amazon primed (no pun intended) in the customer's mind so next time they go online shopping they default to Amazon. Once you're using Alexa, there's an Apple effect encouraging adoption of other Amazon products through ease of use (Amazon Music, FireTV, Audible, etc). Amazon is also monetizing their products with ads, I'm sure that's part of the Alexa strategy as well.
Remains to be seen whether there is a "pull back" from smart devices that impacts the play. I was an early adopter of Alexa... at this point no one in my technical circle has proprietary "smart" home automation devices anymore, and the non-tech folks at best use Alexa to search in the Amazon app (mainly because they struggle with phone keyboards)
What are they using now, if you don't mind me asking?
This might get them in trouble eventually.
Yes. We have a few Alexa's and it's helpful to reorder commodities with your voice as you run out of that item (batteries, tape, printer paper, etc). I just add them to my cart and check the price later, but I like it because I'll likely forget to reorder some of those things if I don't do it right away.
Apple and Samsung own our pockets with their devices (and associated platforms), Amazon wants to own the spaces where our phone isn't always close by or easy to use (mostly home and car).
The Echo devices are way way too dumb. The user's Cloud account needs app-accessible storage.
Their actual purpose(s) will be emergent and are still being discovered.
Have they been funneling billions of RD into the software side, or are the units comically underpriced and have a BoM in the hundreds?
Then on top the software development is fairly novel - so they're probably spending quite a bit on development efforts related to the devices.
They're eating the costs for running the backend processing for all of these devices (they're sold as a one time fee, despite requiring services provided by Amazon servers).
Finally - they were promoting the ever loving shit out of the development tooling to app developers for a long time with a lot of seminars, development guides, free services on aws, etc.
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My strong guess is they wanted them work out the same way Kindles have - loss leaders that more than make up for it by securing digital goods purchases. But personally - I spend lots of money on amazon for books for my Kindle, and I spend basically nothing related to Alexa (there's literally just nothing I want to buy through it).
Lately my Alexa has started inserting promotional content into the standard voice responses (bs like "Alexa what time is it" returns the time, and then a "and it's a good time to watch the new Rings of Power tv show? should I tell you about it?").
They're going to go into the trash shortly at this rate. I'll switch to a self hosted replacement like mycroft or something.
Long-term, the hope is probably that the halo effect - "oh, I have Alexa, so I'll buy a Ring security system" and "Alexa, buy cat litter" sort of stuff - balances it out nicely.
In my experience you learn how to make them do 1-2 things. You learn a few patterns. But beyond that, even if they work 95% of the time, that 1 in 20 is annoying enough to make me not want to use it and just push a few buttons.
Maybe case in point is using voice in the car. It should be the best, most obvious application. Yet aside from maybe texting, people want things like Apple CarPlay - a big touchscreen - not voice commands.
The only good use case I've seen is if you're having a conversation / debate with someone you can use them as a real-time fact checker.
Do you have an uncommon accent?
I don't know the answer, but i wonder why you say that's what people want, since the high end BMW and Audi and Mercedes cars etc now all have their own voice commands to _avoid_ using the touchscreen (presumably for driving).
I wonder how they even get a survey that's representative.
https://www.cnbc.com/2021/05/29/apple-carplay-massive-succes...
I use Google Home and it has a voice match feature which will only accept on commands for allowed voices. Some people might not like this for the privacy aspect though.
Of course this is all academic. Anyone can get into a home via the windows. It's just that half of all Americans live in a home that has a gun, so getting out alive might not be as easy as getting in.
Alarms, timers for the kids, playing music all day, asking for knowledge questions, etc. For example yesterday my kids asked "which is after a tortoise or a snail". The kids use it a lot because they don't have phones to google stuff but they always have Alexa to ask.
Setting multiple named alarms while cooking and often my hands are not clean to handle a phone or they're holding something going in an oven or they're stirring something.
Adding things to Todo lists or shopping lists as I notice them.
Setting alarms when I set a cup of tea to brew so I don't forget about it. I have to walk back to the room to stop it ringing, which means I can add milk and pick up my tea.
Changing what I'm listening to while washing dishes.
I'm already distractible enough, not having to pick up my phone to do them also means I'm less likely to get distracted.
There are just so many buttons to push, it's not only about lights. Remember, they have 'routines' that can easily equate to dozens of button pushes. Even without routines, I can tell it to set all lights in a room at some percentage. And no, I can't just wire a dimmer, because they are spread across light fixtures. Sometimes your hands are busy and it's good to be able to control stuff.
If anything, they should make it easier to add commands (I want to be able to change 3D printer settings without have to fiddle with the interface – it's connected to Homeassistant so it has access to controls).
It's not just for that either. Alarms, timers, unit conversions, translations, calls from echo to echo in different rooms, weather at some location, purchases (and asking where are they)... you can even ask if some food can be given to your dog.
I will agree that it's infuriating when they don't work. And it doesn't seem to difficult to fix. There are commands I use frequently, chances are I am using them again. Asking to turn of the lights and having it play some random song is ridiculous.
What do dedicated hardware devices like Alexa add above and beyond that? They have a nicer speaker for playing music, but there's a whole ecosystem of bluetooth speakers you can use your phone with. They can control smart lightbulbs which I think phones don't have the right antenna for... but it feels like that could be solved by a $20 Chromecast-like dongle that your phone talks to over wifi. Is there anything else left to justify separate hardware, especially hardware that's likely sold break-even or at a loss?
The third party ecosystem never caught up and there is no killer app for Alexa other than those 4 use cases. The API (slots/intents) is limited and hard to create any useful interaction with it. My gut feeling is many divisions will be affected in Alexa.
Isn't that enough money to keep employees through a downturn?
The flip side is that individuals have almost no borrowing power. The bottom 40% of the US population has a negative net worth, so can't borrow anything:
https://news.harvard.edu/gazette/story/2016/02/the-costs-of-...
To me, this looks like evidence that profit comes from offloading externalities onto the public.
Ordinarily, workers could find work at other companies. But because companies are so large now, they have effective monopolies in markets like shipping. So layoffs could be used as a signal to bring companies up on antitrust charges.
Of course they're going to dump externalities onto the public any chance they get, and we should strive to limit their capacity to do so... But in this case I'm not sure what you mean exactly? Nor do I understand what you mean about bringing antitrust because of layoffs? That sounds much more difficult to justify than most of the other reasons you might bring antitrust against these companies.
The unemployment benefits system is indeed designed to buffer against unemployment which is why both employees and employers pay into it.
This is like how in medieval times it was your duty to serve the lord and make him rich.
Because keeping people paid for a year during a downturn is cheaper than firing them and then rehiring and retraining someone else a year later?
1. The salary of a current employee will always be lower than the salary of a new hire, even a year later,
2. The hiring process itself costs tens of thousands of dollars,
3. A new joiner is useless for 2 months, needs to be babysat for 4 more and will ask constant questions for 6 more (if not 18). This costs the company a lot in terms of support that has to be provided from more senior (in tenure) employees.
Externality has a specific meaning. It is a cost of production passed on to the customer or third party.
Not everything that has a consequence is an externality.
If I put my trash in your bin, that would be an externality.
Not employing someone is neutral.
Laid off workers and the state are not harmed by the company that stops sending paychecks.
To think otherwise leads to absurd conclusions.
https://www.researchgate.net/publication/277267537_Securing_...
Amazon is very specifically optimizing their company to get rid of the need for both of those things!
Edit: This assumes I spend my loan on payroll which is what the OP originally suggested.
No, my business would have the existing assets of $1m, new assets of $1m in cash a liability of $1m, leaving a value of $1m
(minus any interest payments)
Now, if you squander the $1M and don't generate more than $1M+interest, your business will lose value... but you would have to lose $2M to then increase your liabilities to wipe out your original valuation
Acquiring the loan moves you up to $3M in assets (original assets, plus $1m cash from the loan) and $2M in liabilities (employee salaries + $1M loan)
When you pay those employee salaries, you wipe out the salary liability and the $1M cash asset from the loan. This leaves you the original $2M in assets, and the $1M loan, for a net valuation of...$1M.
Basically, the loan ends up replacing the salaries as a liability on your balance sheet.
That is what they are designed to do. That's why people pay to be part-owners.
If you have a crystal ball and know when the economy will reverse, no one will fire anyone. Otherwise you have to cut costs and human labor are the biggest costs in most companies. Sure, we could get into a culture where we ask people to take pay cuts for a brief period in return for stability but that seems to not work for some reason so people get laid off.
Why go into debt if it's not going to benefit the company in the long term? We don't actually know how long economic downturns can be, or what kind of turmoil will be encountered. Why keep a liability.
Then you have the attitude of management itself. There has been talk for some time that companies have been going crazy with hiring, and that's certainly the case. However, many mangers and execs have gotten in the mindset that their being horribly abused, and their employees have gotten lazy and entitled.
Have you talked to a manager, or CTO in the last few years (off the record, and not as an employee/coworker). They absolutely despise the average working stiff and are relishing the opportunity to exercise their powers again.
Companies that have so much cash they can employ 100K+ developers on top of goodness knows how many designers, PMs, POs etc. of course they hire and fire. They can afford to offer above-average conditions when the markets need it and everyone goes flocking there only to be surprised when their job is taken away at the next point the shareholders are bothered about ROI.
If you want to ride the unicorns and take the risk, that's fine, but there are plenty of people around the world who have far fewer choices with their work and are paid far less so I don't feel too bad that someone's Christmas might be not as expected.
If you want job security, get a job somewhere that isn't trying to earn their next billion, where you can make a difference, where you are appreciated and where work/life balance means something. I expect you would feel much better :-)
Though I had no luck finding government jobs, because the red tape is ridiculous.
Expected to leave massive amounts of salary on the table. You could be talking 50-150k less.
EDIT: found a source, 130K in india in 2017... == 33% of workforce
"Today, the company employs 130,000 people in India — about one-third of its total work force, and more than in any other country. Their work spans the entire gamut of IBM’s businesses, from managing the computing needs of global giants like AT&T and Shell to performing cutting-edge research in fields like visual search, artificial intelligence and computer vision for self-driving cars. One team is even working with the producers of Sesame Street to teach vocabulary to kindergartners in Atlanta."
https://www.nytimes.com/2017/09/28/technology/ibm-india.html
You should have sympathy for PEOPLE. Every one of the PEOPLE effected by any lay off or industry change is a person. It could be your relative, it could be you, ti could be me. Let's get out of the "I don't feel too bad for that person that's not me" and try to have compassion for fellow humans.
edit: spelling typo
So you think a job at a startup is more secure? You think a job at a smaller company is more secure?
BigTech layoffs might make news because they're Big but plenty of smaller companies will be laying off as the economy contracts, too. Also 99% of Amazon employees will be fine and the ones that are fired, at least on the corporate side, will find new jobs quickly because the rest of the industry is clamoring to hire ex-FAANG. Hard to see how working there is some huge risk.
... What?!?!? Where is this magical place you're talking about. Small companies can be better, but they can also be much worse, and you may have less recourse. You can really hide under a rock at a big corporation for like... decades.
Many of the "meaningful" jobs are low paying, and can be even more soul crushing. Teachers aren't always treated great. It's far more of a "hated by all" profession than you realize. Social work seems to be a tough racket on many fronts. You could have to do some difficult things and are almost guaranteed to see levels of despair and injustice that are difficult to bear.
All that for pathetic pay, but at least you have good job security, maybe sometimes with an asterisk; so best case you're one of the lucky ones guaranteed to be poor forever. I've heard that non-profits can be incredibly toxic as well.
In fact it almost seems that the "meaningful" professions are even worse, usually. There's a lot of corporate environments that are quite pleasant, have good pay and decent security.
"Heart" work almost always seems like a bad bet for financial security, and work environment. Doesn't seem worth it unless you're a very specific kind of person with talent that HAS to be a part of something, so is willing to put up with almost anything; boss puts cigarettes out on your forehead to pass the time? Sounds great, I'm just excited to be making music!
You will ALWAYS have 10 people tirelessly fighting for the job.
Edit: looks like they grew headcount by 60% (+500,000 people) in 2020 and 23% (+310,000) in 2021.
Today's announcement reduces headcount by 1% which is tiny compared to their growth.
https://www.macrotrends.net/stocks/charts/AMZN/amazon/number...
Disclaimer:
I have a job and haven't been actively looking, but recruiters will reach out and I'll usually go through the interview process if only to practice.
And here we go:
I got the initial email around the middle of September for one particular division. As I went through the initial assessment, that division "met their hiring goals" and I was transferred to another division.
Through September and October, I organized the virtual on-site. And my interview was scheduled for last week. The weeks prior, as we know, the shit hit all the fans. I fully expected to get a "too bad, so sad" email saying my interview was cancelled. It wasn't. I went through the interview and I'm waiting to hear back currently.
But yeah, I would not be surprised to get a rejection. But from the point of view of my experience, nothing they've done or said has made anything seem off.
I've removed everything from my linkedin, except my current position, and the only people hitting me up are Amazon recruiters. In fact, once I edited my profile, the rate increased.
The nice thing is that interview results at Amazon are valid for 6 months; my understanding is that once you pass the interviews you essentially have a free ticket for 1 job (at an equivalent level) anywhere in Amazon. And so waiting until things open up in 2023 is an option.
How do you know this? I think its a bit of a stretch to say _everyone_ who has been laid off because of a looming recession has been given a package, unless you just meant the short list of tech in the very specific area of SV. If so I would encourage you to broaden your horizons to think of more than just tech.
I still sympathize with these people, it sucks to be laid off. They are losing their jobs because someone at Amazon screwed up or took risks the laid off person couldn't control.
Why to a lesser extent? 2008 seemed far worse due to the overall recession impacts and the fact that it wasn't just tech companies. I got laid off from my tech job at a non-tech company for example. Both occurrences wrecked a lot of lives (mine included) though, I'll give you that.
My personal favorite Gary Oldman role.
Last I knew he's never even watched the movie.
This is the game, right? For the first time since Alexa launched, Amazon is looking at a painful Q4, so the rest of retail can't cover up the Devices org's big wart.
So why are these companies still shedding jobs? I'm starting to wonder if the tech industry is disproportionately impacted similar to dot com bubble from 2000.
2. Disparate impact. You can have low or no GDP decline while still seeing some sectors take massive short-term and long-term hits.
Profits will be down so need to offset cost. Keep the share price high and get those option bonuses.
The moment that sticks with me is (former) employees wheeling all the Herman Miller chairs through the parking lot with the facilities guy holding the door open saying "Take it. Take it all..."
That's what the word "correction" implies: That it's going down, not because the business itself is bad or anything in the market has fundamentally changed, but because it was valued "incorrectly" (where "insane" would be an extreme form of "incorrectness"), and that its value is being "corrected".
I haven't seen signs of that latter, larger one yet. Fingers crossed...
This is the really surprising thing to me - many(most?) of these companies are data driven companies. Companies with teams of analytics folks, data scientists, modeling-experts and teams of engineers working on tools to do ML and large scale data analytics. Do none of them actually use their tools and internal expertise to model their own hiring practices and historical market trends? Or maybe they did and always knew they would need to do mass layoffs when inevitably the cheap money pump got shut off?
Being data-driven is a method for justifying decisions. But it's still a human making a decision in the end.
I've got a story here from a previous job that illustrates this.
I used to be part of an Analytics and Forecasting team at a well known non-tech company. It's a global company that sells a lot of things to consumers. This means they strive to have a very good understanding of sales and manufacturing volume because that drives everything from raw material orders and supplier contracts to how much of product to put where so people can go and buy it.
We had short term forecasting teams generating forecasts (at a brand level) and analysts (mostly aggregations, not really statistical inference) that rolled into a medium term analytics/forecasting team(s), that rolled into a long term analytics/forecasting team(s). Not to mention Research teams that did pure statistical and economic modeling to try and understand market factors in a more comprehensive way so they could better inform all these forecasts. All of this went right to the top of the food chain.
The glue between all these teams were managers. And one of the fundamental problem for managers with all of this comes from this simple question - if one of these teams provides a forecast that is very different from the rest, what does that mean? Is that team right or wrong? And how does that information now flow into the other teams so they can incorporate it into the info that goes upstairs.
From this question emerges an astonishing amount of group think. Not just from the company I worked at, but at all competitors as well.
When companies ask "Do we forecast sales to go up" they are really asking "Do we think this market segment is going to go up in the future and we have the right strategy to move up with it?" Cars, Snacks, phones, whatever the market segment, you're really asking how you are doing compared to your competitors in the space.
To understand where you are going, you need to understand how your competitors are doing. This data comes from agencies and consulting houses. But since everybody uses the same data from the same agencies, everybody is feeding each other. What can emerge from this is a massive amount of group think.
I'm greatly simplifying everything of course. When these teams get it right they do amazing stuff like making sure the thing you want to buy is available when you want to buy it. But when they get it wrong, it seems like most everybody else gets it wrong as well. This can slowdown an entire industry as everybody realizes they got it wrong.
As old as the bible, the saying, "Physician, heal thyself!"
This! It’s exactly what have occupied my mind since layoffs started. May they did use tools. But, remember the output is a forecast, not a shining light out of a crystal ball. Estimates/Forecasts can go wrong and clearly turned out that way.
The current round of job cuts and stock drops puts the industry back to ~mid 2020 levels.
So it is definitely a correction, but hardly world ending.
This time, there is a lot more growth from many companies but we also see the results of that work, products and services exist as a result. There is waste but not like in 2000.
I think a lot of folks here have never been through a down cycle before though and anything that’s not frantic growth and double digit comp growth YoY will feel like a nuclear winter.
Let the severance period end.
These layoffs only get press due to the brand names of the companies
There is a meaningful distinction between the expected nature of the role and benefits of a contractor vs full time employee.
This isn't to say that laying off contractors doesn't matter, but its not unexpected or as good of a means to understand a company's outlook.
Of course it could get much worse than this but we aren't there yet.
Even if they have 1% churn each month, that's about 16,000 turnover a month. Laying off 10,000 is not news until we find out where the cuts are happening.
Disclaimer: I work for Amazon (but also haven't stated any opinions)
The delusion and denial about how this is not a tech crash in 2022 is really quite hilarious and I do not believe that it is over just yet.
This does seem like some weird massive manipulation of the economy by the elites to grab more wealth and control. Or it's just some collective revenge against the various antiwork / worker empowerment / etc that came out of COVID to put the proles back in their place.
Or maybe its just that a lot of investment dollars are drying up from overseas with inflation.
As for the massive amount of manipulation, that was done in plain sight. The fed had injected $$$ and low interest rates into the economy since 2009 and finally the spigot stopped.
That said, we never corrected to the degree the tech industry seems to be now. I'm glad I never followed through with those Facebook recruiters ...
https://www.macrotrends.net/2015/fed-funds-rate-historical-c...
That this is happening at a number of big tech companies isn't a surprise I don't think. The biggest layoffs this year so far have been at companies that made large scale changes (Meta, Twitter) or over-hired over the course of the pandemic when that level of business turned out not to be permanent (Stripe, Shopify).
It's possible that this is industry-specific. Tech companies exploded during the pandemic if they had anything to do with stuff you do indoors, and this is the real "post-pandemic" year (talking economically).
Other industries which took it on the chin during the pandemic are recovering well this year, notably anything travel-related seems to be doing incredibly well and some companies are on track for banner years.
That said, I suspect we're going to see a few quarters of stagnant growth (0% to 0.3%) or mild contraction (0% to -0.3%), maybe not enough in a row to declare recession.
More importantly: that's a real (inflation backed out) not nominal (inflation ignored) figure
Less importantly: that's an advance estimate, not a final figure.
A couple of industries like tech are having some bubbles popped, and some places like the UK are having a recession, but the US is not in a recession. You all are just too used to 15 years of tech boom so anything different looks like a recession.
The latest wave of followers came due to the latest Twitter and Meta layoffs.