Amazon has confirmed the layoff of 16,000 workers worldwide, just three months after announcing the elimination of 14,000 positions. The company communicate the cuts as part of a plan to “eliminate bureaucracy” and streamline its organizational structure. The interesting thing is that the announcement comes at a time of record profits.
Why it is important. This is the second large wave of layoffs at Amazon in just one quarter, bringing the positions eliminated to around 30,000. The figure becomes more relevant if we consider that next week Amazon will present its financial report, where Wall Street analysts expect revenues of more than $211 billion and profits of more than $21 billion, according to inform The New York Times.
Cuts especially in the United States. The layoffs primarily affect Amazon corporate employees, who make up about 350,000 of the company’s 1.5 million total global workers. According to account BBC, most of the cuts will be concentrated in the United States, although some positions in the United Kingdom could also be affected. In the October wave, more than 1,500 positions were eliminated in California alone, most of them software engineers.
How to the workers have found out. He official announcement It has arrived after an error. According to explains BBC, On Tuesday night, Amazon Web Services (AWS) workers received a calendar invite to a meeting the next day. A draft message signed by Colleen Aubrey, senior vice president of applied AI solutions at AWS, mistakenly appeared in that invitation, detailing the layoffs under the codename “Project Dawn” (Dawn is the name Amazon uses internally to refer to the layoffs).
The message was quickly deleted, but the media had already covered it. It was hours later when Amazon published the official statement.
Restructuring. Beth Galetti, senior vice president of people experience and technology at Amazon, wrote in the official post that the changes seek to “strengthen the organization by reducing layers, increasing ownership and eliminating bureaucracy.” He added that they do not plan to establish “a new pace” of reductions every few months, although he left the door open, adding that each team will continue to evaluate its structure “as appropriate,” especially “in a world that changes faster than ever.”
Where the money goes. As Amazon cuts tens of thousands of corporate jobs, it is investing massive amounts in another direction: artificial intelligence. According to the NYTthe company spent $125 billion on new data centers and other capital investments last year, primarily to compete in the AI race. Amazon CEO Andy Jassy already warned last summer to corporate employees that artificial intelligence would mean that, over time, the company would operate with fewer such workers.
Contradictions. In autumn, Jassy told investors that the layoffs had less to do with AI or finance and more to do with reducing bureaucratic layers. However, according to point NYT, reductions in several divisions were based on specific goals to cut operating costs. All this while in the quarter from July to September, sales reached 180,000 million dollars and profits exceeded 21,000 million.
Yocollateral impact. On the other hand, just before Amazon’s announcement, UPS also has communicated which plans to eliminate up to 30,000 jobs this year. Guardian share that UPS has been working to reduce the millions of low-value deliveries it makes for Amazon, since although it is its main customer, this large volume of shipments provides “little benefit”, referring to the fact that they are cheap packages that represent a high operating cost for the company.
What happens to those affected? Just like share company, laid-off employees in the United States will have 90 days to look for an internal position at Amazon before permanently leaving the company, although the period varies by country. Those who do not find or seek a new position will receive compensation, outplacement services, and health insurance benefits.
Cover image | Israel Andrade
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