Nov 16 (Reuters) – Amazon.com Inc (AMZN.O) on Wednesday said it had laid off some employees in its equipment group, as a person familiar with the company said it was still cutting around 10,000 jobs, including in its retail division and human resources.
The announcement, the first by Amazon since media outlets including Reuters reported on its layoff plans on Monday, heralded a dramatic shift for a company known for its job creation and gave shape to recent layoffs in the tech sector.
Amazon chief executive Dave Limp said in a blog post that the company has decided to consolidate Teams into its device unit, which is popularizing speakers that control consumers through voice. It informed staff on Tuesday that it had been cut.
“We continue to face an unusual and uncertain macroeconomic environment,” he said. “With that in mind, we’ve been working over the past few months to further prioritize what’s most important to our customers and the business.”
Plans, still in flux, to eliminate about 10,000 jobs by cutting more units would equate to a roughly 3% reduction in Amazon’s roughly 300,000 employees. The company has offered voluntary takeovers to some HR employees, said the source familiar with Amazon’s job cuts plans.
For years, the online retailer’s goal has been to make Alexa, the voice assistant that powers the devices it sells, ubiquitous and present to place every grocery order, though it’s unclear how many users are using it for tasks more complex than checking messages or have assumed weather .
Alexa, a project inspired by a talking computer in the sci-fi show Star Trek, had reached 10,000 employees by 2019.
At the time, Amazon touted sales of more than 100 million Alexa devices, a number that hasn’t been publicly updated since. Founder Jeff Bezos later said the company often sells Alexa devices at a discount and sometimes below cost.
While Amazon struggled to code intelligent answers to every question Alexa might ask users, Alphabet Inc (GOOGL.O) Google and Microsoft Corp (MSFT.O)-supported OpenAI had breakthroughs in chatbots that could react like a human without holding hands.
Dozens of people have posted on professional networking site LinkedIn that Amazon has fired them, including people claiming to be working on Alexa privacy and software for the company’s cloud gaming service Luna.
Following the layoff news, shares pared losses to close about 2%.
For Amazon, the cuts stand in sharp contrast to efforts months ago to double the base salary cap to compete more aggressively for talent.
As of September last year, it had marketed 55,000 corporate jobs worldwide during a careers fair, an increase dwarfed only by hiring at Amazon’s fulfillment centers. Before long, the online bookseller that Bezos planned on a road trip less than 30 years ago was America’s second-largest private employer with more than 1.5 million workers, including warehouse workers.
The turnaround was abrupt. The retailer is now reacting to sales that could rise just 2% this holiday season, compared to a 38% jump two years ago. Amazon’s chief financial officer told reporters last month that consumers are on tighter budgets amid inflation and higher fuel costs.
Its cloud computing division, a profit engine for the company, also grew revenue at a slower quarter-over-quarter rate for the past year on a constant currency basis.
Andy Jassy, who rose to the role of CEO in 2021, has so far focused on cutting costs and stemming Amazon’s 43% share price decline this year.
Under his tenure, Amazon announced the end of its virtual health service for employers and the slashing of its much-vaunted autonomous sidewalk delivery program. It also froze the incremental hiring of companies.
Reporting by Jeffrey Dustin in Palo Alto, California. and Aditya Soni in Bengaluru; Edited by Arun Koyyur, Mark Porter and Josie Kao
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