Amazon’s large-scale restructuring
E-commerce giant Amazon is planning to cut more than 18,000 jobs, it was revealed on the 5th.
According to a statement made internally by CEO Andy Jassy, the restructuring will affect the Amazon store, which allows users to create custom branded pages, and the human resources department. We plan to notify affected staff directly after January 18th. Some information was leaked, so it is said that it has reached the public announcement at this time.
The 18,000 job cuts represent 6% of Amazon’s global workforce (about 300,000). That’s about 1.2% of the 1.5 million people, including warehouse workers.
In November 2010, it was reported that Amazon was planning to cut 10,000 jobs, starting with the device division. At the time of writing, the company’s stock price (AMZN) is down 2.37% from the previous day and down about 50% from the previous year.
With signs of recession
Since 2020, tech companies have ramped up hiring as labor shortages accelerated during the economic recovery following the coronavirus pandemic. However, in 2022, when growth slowed, high-tech companies changed their policies one after another. The industry is the top category, laying off more than 150,000 people in the past year, according to data site Layoffs.fyi.
Amazon has also made efforts to acquire human resources, such as raising the upper limit of basic salaries for engineers and others to about 40 million yen annually, which is more than doubled in February 2010. However, Jassy acknowledged in an internal statement on May 5 that “(annual planning) has become more difficult given the uncertain economic conditions. We have been hiring rapidly over the past few years.” ing.
Meta (formerly Facebook) in the United States announced that it will cut 11,000 employees, or 13% of its total workforce, at the end of 2022. Chief Executive Mark Zuckerberg said, “We were wrong to expect the pandemic to continue.” IT giant Microsoft also laid off 1,000 employees in October.
association:Meta CEO Mark Zuckerberg announces 10,000+ layoffs
The trend of job cuts by tech companies is expected to continue through 2023, even after the restructuring of tech giants. Google parent Alphabet has suggested cost cuts, including layoffs. Marc Benioff, chairman of Salesforce, which provides a cloud-based business application, announced on the 2nd that he plans to cut 10% of his approximately 8,000 employees, citing that he has hired too many people.
It has been pointed out that these developments are similar to the period from 2008 to 2009, when the Lehman shock spread the financial crisis and plunged the global economy into recession. “Tech giants are trying to protect themselves from being caught in a cycle like the one they experienced in 2008-2009,” an executive at executive search firm Stanton Chase told Reuters.
Behind the slowdown in growth is continued inflation. The US CPI rose 7.0% in December from a year earlier, prompting businesses and consumers to cut spending.
The US Federal Reserve (Fed) has raised interest rates over the past year in an effort to fight inflation. But there are fears of a recession if monetary policy goes too far. If that happens, the market will be more interested in when the Fed will shift to monetary easing to boost the economy.
In December 2008, after the collapse of Lehman Brothers, the US Federal Reserve Board (FRB) introduced a zero interest rate policy to guide policy interest rates to near zero, which continued until December 2015. During this time, the US market plunged into a “financial market” that rose against the backdrop of monetary easing and excess money. While the US 10-year government bond yield remained at a low level (around 2.0%), stock prices rose significantly.
association:Commentary on the relationship between government bonds and interest rates, and the impact on the cryptocurrency market