Amazon Likely To Lay Off Up To 20,000 Employees, Including Top Managers, To Cut Costs: Report

Twenty thousand employees are the equivalent of about 6% of corporate staff, and about 1.3 per cent of Amazon's total 15 lakh-strong workforce, including global distribution center and hourly workers

US e-commerce giant Amazon plans to lay off as many as 20,000 employees in the coming months, including distribution center workers, technology staff, and corporate executives, according to a report by Computerworld. The coompany has decided to sack employees after it went on a hiring spree during the Covid pandemic.

Amazon employees are ranked from level 1 to level 7, and staff at all levels will likely be affected, according to sources with direct knowledge of the matter, who spoke with Computerworld requesting anonymity. The New York Times first reported in mid-November that Amazon would enact mass layoffs, and as many as 10,000 people would be sacked.

According to the report by Computerworld, managers over the past few days have been told that they should try to identify work performance problems among employees, as part of an effort to lay off about 20,000 people.

Twenty thousand employees are the equivalent of about 6 per cent of corporate staff, and about 1.3 per cent of Amazon's total 15 lakh-strong workforce, including global distribution center and hourly workers.

The report has added that corporate staff have been told that employees will receive a 24-hour notice and severance pay. “There is a sense of fear among employees in the company as the news has come out,” one of the sources told Computerworld. The layoffs would be the largest staff reduction in the company's history.

“There is no specific department or location mentioned for the cuts; it is across the business. We were told this is as a result of over-hiring during the pandemic and the need for cost-cutting as the company's financials have been on a declining trend,” said the source.

Amazon CEO Andy Jassy recently has defended massive layoffs at the company, saying, "We just felt like we needed to streamline our costs". He justified the mass layoffs at the New York Times DealBook Summit, citing economic uncertainty.

Amazon's retail business grew faster during the early days of the pandemic and "it forced us to make decisions at that time to spend a lot more money and to go much faster in building infrastructure than we ever imagined we would," Jassy said during the event in the US.

"Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments. Those decisions will be shared with impacted employees and organisations early in 2023," Jassy wrote in the message.