After Meta and Twitter, now Amazon becomes the latest to join layoff spree

After Twitter and Meta, now tech giant Amazon looks to be the latest to layoffs its employees in units that have failed to turn a profit this year, as per the Daily Mail report.

Amazon.com Inc is undertaking a review of its unprofitable businesses, including the devices unit that houses voice assistant Alexa, to cut costs, the Wall Street Journal reported on Thursday, sending its shares up 11 percent.

Following a months-long review, Amazon has told employees in some unprofitable units to look for jobs elsewhere in the company, while moving to redeploy staff from certain teams to more profitable areas and closing teams in areas such as robotics and retail, as per the WSJ report.

Jamie Zhang, a software engineer at Amazon Robotics AI, informed in its LinkedIn post that he and his entire robotics team has been laid off.

In a post, Zhang wrote, “My 1.5yrs tenure at Amazon Robotics AI came to an end in a surprising layoff (our entire robotics team was gone!) It was a great journey to work alongside the amazing leaders and engineers, and for my part to help build out large-scale distributed systems via AWS for our robotics CI / CD pipelines. Thank you all for making me a better software engineer in the process. For the new chapter, I am open to both local (CO) and US remote opportunities for software engineering positions. Referrals and direct messages are most welcome!”

Amazon is closely evaluating its Alexa business and is currently considering whether it should focus on trying to add new capabilities to the voice assistant, which is available on a variety of Amazon devices, the report added.

Adding capabilities would require greater investment, and many customers use the device for only a few functions, according to the report.

The unit that houses Alexa has posted an operating loss of more than $5 billion a year, the WSJ reported, citing documents.

"We're of course taking into account the current macro-environment and considering opportunities to optimize costs," Amazon spokesperson Brad Glasser said.

Glasser said the company was "optimistic about Alexa's future" as it remains an important business and area of investment for Amazon.

On 3 November, a company executive told Reuters that the Amazon will freeze hiring in its corporate workforce as the e-commerce giant deals with an "unusual macro-economic environment". 

"We anticipate keeping this pause in place for the next few months, and will continue to monitor what we're seeing in the economy and the business to adjust as we think makes sense," Beth Galetti, senior vice-president of People Experience and Technology at Amazon had said in a blog post.

As per Bloomberg report, Amazon became the world’s first public company to lose a trillion dollars in market value as a combination of rising inflation, tightening monetary policies and disappointing earnings updates triggered a historic selloff in the stock this year. Shares in the e-commerce and cloud company fell 4.3 percent on Wednesday, pushing its market value to about $879 billion from a record close at $1.88 trillion on July 2021.

The world’s largest online retailer has spent this year adjusting to a sharp slowdown in e-commerce growth as shoppers resumed pre-pandemic habits. Its shares have fallen almost 50 percent amid slowing sales, soaring costs and a jump in interest rates. Since the start of the year, co-founder Jeff Bezos has seen his fortune dwindle by about $83 billion to $109 billion, according to data compiled by Bloomberg. 

Last month, Amazon projected the slowest revenue growth for a holiday quarter in the company’s history as shoppers reduce their spending in the face of economic uncertainty. That sent its market value below $1 trillion for the first time since the pandemic-fueled rally in tech stocks more than two years ago

"Experimentation and running with too many things that don't generate a return is no longer a luxury Amazon can afford," GlobalData analyst Neil Saunders said.

Recently, Meta laid off 11,000 employees, around 13 percent of its total workforce. Twitter Inc.’s cutbacks are under particular scrutiny as new owner Elon Musk shakes up the social-networking business and pares roughly half its jobs. Even Apple Inc., which has outperformed most of its peers this year, is slowing spending. Last month, Microsoft Corp laid off under 1,000 employees across several divisions.

According to data from consulting firm Challenger, Gray & Christmas cited by Bloomberg, the tech sector also shed 9,587 jobs in October, the highest monthly total since November 2020. The report further stated that the total job cuts announced by US-based employers for the past month, meanwhile, are also up, by a marked 13 percent - with 33,843 fired from various roles across dozens of companies.

(With inputs from agencies)