Amazon.com Inc said it has laid off some employees in its devices division, despite the fact that a person familiar with the company said it still planned to cut around 10,000 jobs, including in its retail division and human resources.
The announcement, Amazon’s first since media outlets such as Reuters reported its layoff plans on Monday, signaled a dramatic shift for a company known for job creation and provided context to the latest layoffs in the technology sector.
Amazon executive Dave Limp announced in a blog post that the company had decided to consolidate teams in its devices unit, which popularized voice-controlled speakers. On Tuesday, it informed the employees that they would be laid off.
“We continue to face an unusual and uncertain macroeconomic environment,” he said. “In light of this, we’ve been working over the last few months to further prioritize what matters most to our customers and the business.”
Plans, which are still in the works, to eliminate around 10,000 roles through unit reductions would amount to about a 3% reduction in Amazon’s roughly 300,000-person corporate workforce. According to a source familiar with Amazon’s job-cut plans, the company has offered voluntary buyouts to some human-resources employees.
For years, the online retailer aimed to make Alexa, the voice assistant that powers the gadgets it sells, ubiquitous and available to place any shopping order, despite the fact that it was unclear how widely users embraced it for more complex tasks than checking the news or weather.
Alexa, a project inspired by a talking computer in the science fiction show Star Trek, had a workforce of 10,000 people by 2019.
Amazon boasted at the time of more than 100 million Alexa device sales, a figure it has not publicly updated since. Founder Jeff Bezos later stated that the company frequently sold Alexa devices at a discount, if not below cost.
While Amazon has worked hard to encode intelligent responses to any question Alexa may receive from users, Alphabet Inc’s Google and Microsoft Corp-backed OpenAI have made advances in chatbots that can respond like a human without any handholding.
Several people posted on the professional networking site LinkedIn that Amazon had laid them off, including people who claimed to work on Alexa privacy and software for the company’s cloud gaming service Luna.
Following the layoff announcement, shares recovered and closed down about 2%.
The news comes after Facebook’s parent company, Meta Platforms Inc (META.O), announced last week that it would lay off 11,000 employees, on top of layoffs at Twitter Inc, Microsoft, Snap Inc, and others.
The cuts contrast sharply with Amazon’s efforts months ago to double its base pay ceiling in order to compete more aggressively for talent.
During a career fair in September of last year, it advertised 55,000 corporate roles globally, an increase dwarfed only by hiring in Amazon’s fulfillment centers. In a matter of months, the online bookseller that Bezos envisioned on a road trip 30 years ago had grown to become America’s second-largest private employer, employing more than 1.5 million people, including warehouse workers.
The change was abrupt. The retailer is now preparing for a 2% increase in sales this holiday season, compared to a 38% increase two years ago. Last month, Amazon’s chief financial officer told reporters that consumers’ budgets had tightened due to inflation and higher fuel costs.
When adjusted for foreign exchange, its cloud-computing division, a profit engine for the company, has also increased revenue more slowly quarter after quarter in the last year.
Andy Jassy, who took over as CEO in 2021, has prioritized cost-cutting and stemming Amazon’s 43% share-price drop this year to date.
During his tenure, Amazon announced the discontinuation of its virtual healthcare service for employers, as well as the scaling back of its much-touted autonomous sidewalk delivery program. It also put a stop to new corporate hiring.
(Adapted from Reuters.com)