Amazon’s planned layoffs could hamper e-commerce and logistics

Twitter, Meta, and now Amazon are conducting massive layoffs as the tech industry faces a massive downturn.

According to a report in the New York Times on Monday, the e-commerce giant is planning the biggest layoff in the company’s history, cutting around 10,000 jobs. The cuts, people familiar with the matter said, will primarily target the company’s device organization, which houses its ailing Alexa business.

However, sources say Amazon (NASDAQ: AMZN) is also planning major cuts at its retail division, which is responsible for online shopping, physical commerce and some of the company’s logistics activities. Hourly workers, who make up the bulk of the company’s workforce, are unaffected.

Amazon did not immediately respond to Modern Shipper’s request for comment.

The layoffs weren’t necessarily unexpected for Amazon, which has stopped hiring in several segments since September. That includes a freeze of more than 10,000 retail job openings, as well as a month-long corporate hiring freeze.

The market has also repeatedly scaled back its logistics activities in recent months, delaying or closing more than 60 warehouses and scrapping services like Whole Foods’ free delivery and its Scout delivery robot as it struggles with slowing trade growth.

What is surprising, however, is that the planned layoffs come right at the start of the high season.

Typically, companies like Amazon increase the seasonal setting to accommodate the increased demand that comes with the holidays. But between April and September, Amazon lost about 80,000 people mostly to attrition, according to the Times. (The turnover rate in the company’s warehouses usually exceeds 100%.)

This isn’t unusual for Amazon, at least in recent years, and the company plans to hire the same number of seasonal workers this year as it did last year.

However, the fact that all of this is happening just before the holiday season is a not-so-subtle sign that Amazon and its newly fired CEO Andy Jassy are firmly in cost-cutting mode as the company tries to recover from a disappointing third quarter .

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