Business

Amazon confirms layoff of about 10,000 staff worldwide

Amazon.com Inc. is laying off employees in its devices and services units, America's second-largest private employer informed its staff on Wednesday following recent reports that it would cut around 10,000 jobs.

Some B.C.-based staff appear to be impacted by the layoffs

Dave Limp, senior vice-president for Amazon devices and services, is shown at a Sept. 25, 2019, event to unveil then-new products that work with the company's Alexa smart devices line. Limp confirmed widely speculated layoffs to devices and services staff on Wednesday. (Ted S. Warren/The Associated Press)

Amazon.com Inc. is laying off employees in its devices and services units, America's second-largest private employer informed its staff on Wednesday following recent reports that it would cut around 10,000 jobs.

The e-commerce giant did not share details on the number of jobs it will cut or a time period. Following the layoff news, shares pared losses and were down about one per cent midday.

The announcement heralded a dramatic shift for a company known for its job creation and added shape to the latest layoffs in the technology sector, which in recent weeks have included similar announcements by Microsoft, Meta, Twitter, Lyft and Stripe.

While Amazon has announced periodic layoffs since 2000, each round has numbered in the hundreds or less.

During the pandemic, Amazon went on a massive hiring spree numbering in the six figures to keep up with demand of customers who found themselves spending a lot more time at home.

But Amazon is not immune to the forces that have compelled other technology companies including Twitter and Facebook-owner Meta to trim staff in recent weeks

The layoff news "isn't a surprise given the recent pressure on operating margins in the retail and cloud units," Bloomberg Intelligence analyst Abigail Gilmartin said.

"These job cuts would be in-line with other tech companies that expanded rapidly during the pandemic and are adjusting due to economic conditions. " 

The cuts would amount to some three per cent of Amazon's roughly 300,000 corporate workforce, leaving warehouse and transportation associates unaffected. 

Amazon employs about a million people in those two units.

The current reduction covers the devices division that includes the company's suite of Alexa smart speakers.

Dave Limp, senior vice-president of devices and services, said in an announcement posted to Amazon's website that the company faces an "unusual and uncertain macroeconomic environment."

"After a deep set of reviews, we recently decided to consolidate some teams and programs. One of the consequences of these decisions is that some roles will no longer be required," said Limp.

Alexa unit takes a hit

The retailer once aimed to make Alexa, its voice assistant that powers the devices, ubiquitous and present to place any shopping order, even though it was unclear how widely users have embraced it for more complex tasks than checking the news or weather.

Some individuals working on Alexa took to networking site LinkedIn on Tuesday saying they have lost their jobs.

The virtual assistant, a project inspired by a talking computer in science fiction show Star Trek, garnered headcount that grew to 10,000 people by 2019.

At the time, Amazon touted sales of more than 100 million Alexa devices, a figure it has not since refreshed publicly. Founder Jeff Bezos later said the company often sold Alexa devices at a discount and sometimes below cost.

While Amazon toiled to encode intelligent answers to any question Alexa might expect from users, Alphabet Inc.'s Google and Microsoft Corp.-backed OpenAI have had breakthroughs in chatbots that could respond like a human without any hand-holding.

Amazon Canada has an estimated 25,000 employees and about 50 warehouse and logistics facilities across the country. It was not immediately clear the extent of the impact on Canadian operations, although at least two British Columbia-based engineers posted within the past 24 hours that they were among those affected.

Bezos ceded day-to-day control of the company last year to concentrate more on his space company, Blue Origin, as well as philanthropical pursuits. Andy Jassy, who previously ran the company's successful Amazon Web Services division, took over as CEO.

Bezos remains the largest shareholder, with about a 10 per cent ownership stake.

With files from CBC News and the Canadian Press

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