Amazon has raised the number of jobs it plans to cut 18,000
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They cant say "we are making record profits" and in the same breath say "we need to fire people to survive" that's not how that works. Pick one.
You can do it the Amazon way, cutting products that are bleeding money, or the Salesforce way asking all units to cut 10% across the board, but just keeping failed products and units because "we have money" isn't really a good reason
You don't "return" people like you return money.
Hiring one good employee is expensive and difficult.
The profitable divisions are probably still hiring, and there might be an option for some of the 18,000 to interview internally before getting terminated, some companies gave that option (30 day internal interview deadline). But you can't just move 3,000 Alexa employees to AWS and expect things to go smoothly
Depends on your time horizon. You can fire allof engineering tomorrow. Costs will drop dramatically, revenue stays where it is. But over time things will stop working and your competiton will take over with new features and being able to keep the lights on when something breaks. Same applies to many departments. Short time dispensible, long term absolutely not.
Ask the Twitter staff. First days the toilets were still clean..
Amazon has been cutting teams that either could not justify their existence or worked in money-losing investments. Alexa was a very public project getting the axe.
Alexa was described as "a colossal failure" which lost 10 billion dollars last year alone.
https://arstechnica.com/gadgets/2022/11/amazon-alexa-is-a-co...
When I invest in Amazon or any other company, I expect Amazon to invest in projects that give me a rate of return that exceeds the 4% that I can easily get from Treasury.
If it can't, Amazon better return my money.
Also, Amazon can't hoard employees that aren't being productive. It is better those employees work for startups and other endeavors.
individually, it sucks short-time, but as a nation we are better off with this system. Tech companies not only have generous severance packages
They absolutely can, and this is a major FAANG recruiting strategy.
Basically suck all the energy out of the room and lock out any possible competitors. MS employed a similar strategy in the late 90s. FAANG does the exact same thing now.
Unless your company is in financial hardship, ditching headcount is similar to a stock buy back. You don’t know how to invest the money, and you don’t know how to invest the people - yet.
I have no words for this one honestly. Watch what a mega profitable company does during a recession and you’ll know everything you need to know. They are not good to workers, from top to the warehouse bottom. I believe every last story about the warehouse workers, all the way to the PIP nonsense.
I think there are large corps that do this well... Publix is employee-owned, and they have never had a layoff in nearing 100 years... (they were founded in 1930, so weathered every major modern economic disaster)
These firings are coordinated across large tech companies to reduce salaries and benefits, make employees work longer hours, and in general shift the power away from employees and back to the executives.
This is a very ignorant take. In 2022 Amazon became the first company ever to lose $1trilion market value.
https://www.bloomberg.com/news/articles/2022-11-09/amazon-hi...
In concrete terms, Amazon's stock prices tanked over 50% in less than a year.
This is not the hallmark of a healthy company.
> These firings are coordinated across large tech companies to reduce salaries and benefits, make employees work longer hours, and in general shift the power away from employees and back to the executives.
Your conspiracy theory ignores the fact that until very recently all companies were on a hiring binge without having any business case beyond "growth", not to mention that they are moving jobs overseas for years replacing highly paid engineers in the US with modestly paid engineers in India and Europe.
Yes, they overhired but also those people hired got experience and a job. They may have instead landed a different job paying less (otherwise they would not have taken this job) or they may have not landed any job at all if all companies decided not to add that 25% growth in headcount.
Do you have any idea how much stress and strain this can put on a person, especially if they are the provider for their family?
Please don't make excuses for one of the richest companies in the world abusing their position and treating human beings like expendible machines.
Perceptions of this can easily be wallpapered over with "Haha, those people are [just] stupid, they should [just] be laughed at [for their stupidity - yours is fine]", but that does not eliminate the problem, it only eliminates awareness of it.
Both hiring and terminating more than they need, depending on which direction they feel the wind is blowing, is the norm; on the termination side, notification requirements (e.g., WARN Act) exacerbate that (I am not saying they are a net negative, just that they encourage pushing the numbers up.)
> They cant say "we are making record profits" and in the same breath say "we need to fire people to survive" that's not how that works
Corporations don’t optimize for odds of survivial; if they are making record profits but could, in their assessment, be making bigger record profits, that’s what they’ll go for.
This might be a bit harsh in relation to Amazon.
I saw a comment on another site mentioning total workforce. A quick look at Amazon's Wikipedia page reveals that they employ 1,544,000 as of September 2022. Is 18,000 really that much?
It's like getting rid of 1 person in an office of 100.
There's also the issue of market forces. On March/2022 their stock price was around $164. It was $143 on August/2022 and it's been plummeting since then. Currently at $83.
I also followed a source link on Wikipedia that led me to this Sept/2020 article: https://www.wsj.com/amp/articles/amazon-to-hire-100-000-in-u... : Amazon to Hire 100,000 in U.S. and Canada. This was during Covid's initial height. I think some people criticized them for this too.
I'm of the position that, in this case, Amazon really has very little choice. These 18,000 might really be excessive. They don't come across as a company that tries to get by with a skeleton crew. They constantly overload to ensure smooth operations.
They are also one of the few "Tech" firms where you can talk to real people at a moment's notice - which is part of this overloading for smooth operations philosophy.
The news industry is incredibly desperate for stories about layoffs it seems.
I don't think this is an informed take. Amazon not only cancelled all hires but also increased the number of employees they want to fire. From the first time in the company's history, they explicitly announced they were going to fire people in a purely cost-cutting approach and in a way that was not tied to employee performance.
If anything, this signals that Amazon changed radically it's corporate strategy from a growth-oriented strategy to a consolidation one. This has strong implications on the company's revenue expectations.
If you simply went through all of a company like IBM's announced layoffs of some percentage, you would find their headcount rapidly converges to a value of 0% sometime early in the company's history. Last time I checked, IBM is a not yet an AI-run business to the best of our understanding.
This is just ignorant speculation from your end. Amazon stopped all hiring rounds over a month ago and even rescinded open offers, and that hasn't changed since Andy Jassy announced the company was going to start the unprecedented firing rounds.
That being said I don’t think that has anything to do with Amazon in this case, just negative coverage of tech more broadly.
I wouldn't have guessed that was 1% of their workforce, nor the turnover rate.
I would've guessed 150-200K, and 25%/year turnover.
Even though this means more people. 18k still sounded huge until I wrote this comment.
18k is huge because Amazon has been killing off entire teams, managers and all, instead of doing the typical Jack Welch decimation tactics.
It's important to name-and-shame companies that can't be bothered to let go of people through legitimate channels of performance reviews, PIPs, allowing transfers, etc. Legitimizing overhire overfire is a dangerous road.
We're all able to do more with less people. IMO It's only a matter of time before we have a one person unicorn company (>1billion revenue). So let's goooo with the innovation!
Probably someone calculated something somewhere saying "If we hire 25% more people to take advantage of the increased demand, we'll earn more profits even with layoffs with heavy severances for everyone after X months".
Especially when the company culture basically boils down to "The individual employee is worth nothing" and "People should be able to be fired as easily as they are hired", which Amazon seems to be, at least judging by the people I've been close to who worked at Amazon.
These companies already know how to hire temp contractors, which is cheaper and cleaners than layoffs with severance.
The real answer is that they pretended the Covid money fountain wouldn't end.
More to the point, it seems that companies were hiring because other companies were too. They didn't want to miss out on the party. Not an economist, but you see this behavior all the the time in markets.
Then after the euphoria wears off they notice:
1. Ditching a lot of unprofitable segments starts to look attractive. The chance for growth could be pretty slim, especially in a slow market.
2. Some of these people are raking in massive salaries for jobs they could get anyone in to do. It looked to many people like the strategy was to buy up people to keep them off the market... not shocking to see the change in heart, which lead to:
3. All these activities were giving employees quite a bit of leverage, and potentially calling into question any managers that might have had "hold down the fort" roles.
My dad with no connections and basic financial literacy, with some eyes on real estate, predicted this since around 2000-2004. I remember growing up and hearing about the certain housing crash that was coming that was so obvious anyone could see it. (sure some specific points of failure may not have been obvious, but we knew what was going to happen)
The gamble was once people went digital only, they won't go back. The bet was wrong. People are back to their 2019 digital habits
Plus, with all the record breaking profits, there is pressure from shareholders to re-invest in the company (and create even bigger record breaking profits)
[1] https://www.bloomberg.com/news/features/2022-10-11/amazon-am...
- Industry wide layoffs != Mistake. By analogy, think about naturally occurring forest fires. Vast majority of ecologists would agree that such fires are healthy and necessary for the long term health of forest biomes. It's not a "mistake" for the trees or brush to become dense when energy or water is plentiful, and it's not wrong for a fire to destroy much of existing forest (allowing new and different growth in the future). So it is with business cycles and investment hypotheses.
- There are many accidental products or inventions, that proved more popular and durable than anyone could reasonably expect. Have you heard the story of how champagne was invented? Dom Perignon (yes the actual historical figure) was a French monk in the 17th century, tasked by the Catholic Church to solve the problem of wine fermentation that resulted in too much carbonation in the Champagne region, since the local climate was such that winter was too cold and the fermentation process was naturally interrupted by winter there in such a way as to introduce unwanted carbon dioxide. Wine with carbonation was considered undesirable, but Dom Perignon tweaked the process (inventing the "French method") in such a way as to invent a drink that consumers surprisingly found preferable (remember, nobody originally wanted carbonated wine at the time). The point of this story is that, there's no way to truly know what becomes a lasting trend or a change in consumer tastes; maybe people really would continue to shop and consume media online at higher rates even post-pandemic because they truly changed their tastes and liked it more, after being forced to do it by pandemic? How could anyone know that carbonated wine would stick around, when nobody had ever shown any interest in it before?