Months after it announced its largest-ever round of layoffs, e-commerce giant Amazon on Monday (March 20) said it would eliminate another 9,000 jobs in the next few weeks, bringing the total number of workers it has fired in 2023 to 27,000.
The development signals the state of crisis the tech industry in the United States finds itself in. Companies like Meta, Amazon and Google, emblematic of the sector’s rapid growth over the last decade, are faltering. Banks such as Silicon Valley Bank (SVB) which specialised in dealing with tech companies had to be shut down over solvency issues.
There have been spillover effects in India too, with Indian start-ups facing the wrath of SVB’s shutdown, and workers being laid off en masse.
Why is Amazon laying off workers again?
In a memo to staff, Amazon’s CEO Andy Jassy said the second phase of the company’s annual planning process, completed this month, had led to additional job cuts. He said Amazon will still hire in some strategic areas.
In January, Amazon announced it would fire 18,000 workers across the globe, marking its biggest-ever round of layoffs in its history.
This time, the cuts will also impact profitable verticals such as its cloud computing unit AWS and its burgeoning advertising business.given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount,” Jassy wrote in his memo.
Earlier this month, the company said it would pause construction on its headquarters building in northern Virginia, though the first phase of that project will open this June with 8,000 employees.
Tumultuous times for tech companies
The development comes days after Meta said it will cut an additional 10,000 jobs, just four months after it let go 11,000 employees. A deteriorating economy has brought about a series of mass job cuts across corporate America, from Wall Street banks such as Goldman Sachs and Morgan Stanley to Big Tech firms including Google and Microsoft.
Earlier this month, the collapse of Silicon Valley Bank – which primarily did business with young start-ups – set alarm bells ringing for upcoming businesses and even large ones such as Pinterest and Shopify since they had significant exposure to the bank.
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