Amazon has announced it will cut more than 18,000 jobs from its workforce – the largest set of layoffs in the US company’s history – while business software maker Salesforce is to cut 8,000 workers in the latest purge of tech jobs.
Amazon cited “the uncertain economy” and said the e-commerce giant had “hired rapidly over the last several years” in making the announcement on Wednesday.
Its chief executive, Andy Jassy, said in a note to employees: “Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles.”
He said Amazon had weathered “difficult economies” in the past and would continue to do so. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”
Jassy said the layoffs would mostly impact the company’s brick-and-mortar stores, which include Amazon Fresh and Amazon Go, and its PXT organizations, which handle human resources and other functions.
He did not specify where the affected roles were located, but Jassy said in the statement that Amazon would communicate with impacted employees “or where applicable in Europe, with employee representative bodies” from 18 January.
The jobs cuts represent a swift about-turn for the retailer that recently doubled its base pay ceiling to compete more aggressively for talent.
The layoffs amount to 6% of Amazon’s roughly 300,000-person corporate workforce. It has a global workforce of more than 1.5m.
In November, Jassy told staff that layoffs were coming due to the economic landscape and the company’s rapid hiring in the past several years. Wednesday’s announcement included earlier job cuts that had not been numbered. The Seattle-based company had also offered voluntary buyouts and has been cutting costs in other areas of its sprawling business.
Salesforce, meanwhile, said it was laying off about 8,000 employees, or 10% of its workforce.
The cuts announced on Wednesday are by far the largest in the 23-year history of the San Francisco company founded by former Oracle executive Marc Benioff. He pioneered the method of leasing software services to internet-connected devices – a concept now known as “cloud computing”.
The layoffs are being made on the heels of a shake-up in Salesforce’s top ranks. Benioff’s hand-picked co-CEO Bret Taylor, who was also Twitter’s chairman at the time of its tortuous $44bn sale to billionaire Elon Musk, left Salesforce recently. Soon after, Slack co-founder Stewart Butterfield left. Salesforce bought Slack two years ago for nearly $28bn.
Salesforce workers who lose their jobs would receive nearly five months of pay, health insurance, career resources and other benefits, according to the company. Amazon said it was also offering a separation payment, transitional health insurance benefits and job placement support.
Benioff, now the sole chief executive at Salesforce, told employees in a letter that he blamed himself for the layoffs after continuing to hire aggressively in the pandemic, with millions of Americans working from home and demand for the company’s technology surging.
“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Benioff wrote.
Salesforce employed about 49,000 people in January 2020, just before the pandemic struck. Salesforce’s workforce today is still 50% larger than it was before the pandemic.
The CEO of Meta Platforms, Mark Zuckerberg, also acknowledged he misread the revenue gains that the owner of Facebook and Instagram was reaping during the pandemic when he announced in November that his company would lay off 11,000 employees, or 13% of its workforce.
Associated Press, Reuters and Agence France-Presse contributed to this report
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