It is the latest tech company to reduce its workforce amid rising worries about the broader economy that Amazon has begun mass layoffs.
Several facilities in California that employ data scientists, software engineers, and other employees of the company were notified by the company on Tuesday that they would be cutting about 260 jobs. The job cuts are scheduled to take effect on January 17. The company did not specify how many more layoffs may be planned beyond those confirmed by California’s Worker Adjustment and Retraining Notification Act, or WARN, which requires companies with 75 or more employees to give 60 days’ notice.
A majority of Amazon’s employees are hourly employees. The company employs more than 1.5 million people worldwide. With homebound shoppers purchasing more items online during the COVID-19 pandemic, online retailers made sizable profits. However, revenue growth slowed after the worst of the pandemic passed and consumers began to rely less on online shopping. This year, Seattle-based Rivian Automotive reported two consecutive losses, mainly as a result of write-downs on its stock investment.
Although the company returned to profitability during the third quarter, investors were unimpressed by its weaker-than-expected revenue and lackluster forecasts for the current quarter, which is traditionally good for retailers. Amazon has already axed a number of projects in an effort to reduce costs, including fabric.com, Amazon Care, and Scout, a cooler-sized home delivery robot. Delaying – or canceling – new warehouse plans across the country has also resulted in the company shrinking its physical footprint. A major point of concern for Amazon, according to CFO Brian Olsavsky, will be hiring in the near future as the company prepares for a slower growth period.