3 Things To Know About More Signs Of Economic Downturn

Amazon, which doubled its workforce when business boomed after the onset of the covid pandemic, is laying off less than 1 percent of its 1.54 million employees worldwide during the holiday season who work in tech and corporate jobs.

This would be the largest round of firings in the history of the 28-year-old company founded by Jeff Bezos and part of a trend of layoffs among tech giants.

People stuck at home during the covid lockdowns turned to online shopping with a vengeance, but supply and demand issues contributed to a slowing economy, prompting Amazon to announce a hiring freeze two weeks ago.

Here are three things to know about more signs of an economic downturn.

Big tech layoffs are having domino effect

Facebook parent Meta is cutting 11,000 jobs representing a much higher percentage of its workforce — about 13 percent.

Twitter, newly headed by Elon Musk after he bought the company for $44 billion, fired about half of its 7,500 employees earlier in November. Snap, Stripe and Lyft are some of the other tech firms that laid off workers in recent months.

These moves are seen as part of a broader reckoning for Big Tech.

Amazon cuts will focus on devices

The cuts will focus on those who work on Amazon devices such as the Alexa voice assistant, as well as retail division workers and human resources, people familiar with the situation told the New York Times. If the 10,000 layoffs occur, they will represent about 3 percent of Amazon’s corporate employees.

A closely watched survey from the National Association for Business Economics has shown a general decline in sales for companies close to a level that corresponds with several past recessions, CNBC reported. 

Employee retention at Amazon was a problem until recently

Earlier in 2022, Amazon more than doubled the cap on cash compensation for its tech workers, citing “a particularly competitive labor market.” Enjoying its most profitable era on record, Amazon struggled to retain workers as consumers embraced online shopping. Amazon doubled its workforce in two years, and upped spending on expansion and experimentation.

More recently, Amazon’s growth slowed to the lowest rate in 20 years at the company as shopping habits changed, high inflation impacted sales, and costs mounted for rapid expansion.

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