American technology and e-commerce behemoth Amazon has started downsizing its non-profitable initiatives amid the growing economic downturn. The company had just announced a hiring freeze last week, as per an internal memo sent out by a top executive.
Internet giant Amazon appears to be the latest to lay off staff members in divisions that have not generated a profit this year, following Twitter and Meta, according to a story in the Daily Mail. The Wall Street Journal reported on Thursday that in order to save money, Amazon.com Inc. is examining its underperforming businesses, including the devices division where Alexa the voice assistant resides. Its shares rose by 11% as a result of this announcement.
Amazon has told certain employees in failing businesses to search for jobs elsewhere inside the company after a months-long evaluation. According to the WSJ, the business is also taking steps to close teams in industries like robotics and retail and redeploy workers from some teams to more lucrative divisions.
Also Read | Mega Meta layoff: Zuckerberg says he has been thoughtful about job cuts than Elon Musk
Amazon Robotics AI software engineer Jamie Zhang announced his release from his robotics team in a LinkedIn post.
According to the report, Amazon is carefully analysing its Alexa business and is deciding whether it should focus on attempting to add new capabilities to the voice assistant, which is already featured on a number of Amazon devices.
Also Read | Mark Zuckerberg confirms Meta to lay off 11,000 employees, will pay 4 months of severance
According to the report, many customers only utilise the device for a limited set of operations, making it more expensive to increase features. The business that houses Alexa has an annual operational deficit of more than $5 billion, according to figures published by the WSJ.
According to a Bloomberg report, a combination of increasing inflation, stricter monetary policies, and disappointing earnings reports caused a historic selloff in the stock this year, making Amazon the first publicly traded corporation in the world to lose a trillion dollars in market worth. The e-commerce and cloud company's shares dropped 4.3 percent on Wednesday, lowering its market worth from a record closing of $1.88 trillion in July 2021 to approximately $879 billion.
Also Read | Disney announces hiring freeze, layoffs amid quarterly loss of $1.5 billion
As consumers cut back on their purchasing in the face of economic uncertainty, Amazon predicted the weakest sales increase for a Christmas quarter in the company's history last month.
Meta just let go 11,000 workers, or around 13% of the whole staff. The employment reductions at Twitter Inc. are receiving extra attention as its new owner, Elon Musk, shakes up the social networking industry and eliminates around half of its workforce. Even Apple Inc. is reducing expenditure despite outperforming the majority of its competitors this year. Microsoft Corp. cut less than 1,000 workers from numerous businesses last month.
Also Read | Twitter asks some fired staff to return, says 'laid off by mistake': Report