Amazon axing 18,000 jobs worldwide to slash costs

Online retail giant Amazon is cutting more than 18,000 jobs worldwide in the largest layoffs programme in its history as part of plans to slash costs.

It is understood the job losses will include the UK and Europe, but the firm has not given details of how each country will be affected.

The world’s largest retailer, which employs around 1.5 million people globally, had warned in November of job cuts amid reports it was targeting 10,000 roles.

It said it had found more jobs needed to be axed as part of an in-depth review of its business and amid the pressure of dampening demand and recession fears.

Amazon said roles that will be affected include those across its online and bricks and mortar stores, such as Amazon Fresh and Whole Foods, as well as back office functions such as its human resources division.

In the UK, Amazon has more than 75,000 employees across the country and has been expanding rapidly, with 25,000 people taken on in 2021 amid the boom in online shopping during the pandemic and another 4,000 hired in 2022.

Alongside its online retail operation, it also has 19 Amazon Fresh stores and seven Whole Foods Market outlets in the UK.

Chief executive Andy Jassy – who took over from founder Jeff Bezos in July 2021 – said in a note to employees, which was made public: “These changes will help us pursue our long-term opportunities with a stronger cost structure.”

He blamed the move on an “uncertain economy”, adding “we’ve hired rapidly over the last several years”.

Mr Jassy also said the announcement had been brought forward after one of its employees leaked the details.

“We decided it was better to share this news earlier so you can hear the details directly from me,” he said.

The group expects to tell staff directly affected by the cuts from January 18 and said it is offering a separation payment, transitional health insurance benefits, and job placement support.

He added: “Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year.”

Another US tech company also announced a round of major job cuts on Thursday, with Salesforce axing around 8,000 workers worldwide, or 10% of its workforce.

A raft of tech giants in the United States have been slashing jobs in recent months as they row back some of the rapid growth and hiring made during the pandemic.

Amazon’s job cuts, which are thought will include UK roles, come as the company also faces the first strike by its UK workers later this month.

Members of the GMB union based at a warehouse in Coventry will walk out on January 25 in a dispute over pay after voting in favour of taking industrial action.

Joshua Warner, market analyst at City Index, said: “With growth harder to come by and inflation still driving up costs, the focus is now gradually shifting to which companies can protect profitability during these tougher times by finding savings.

“Amazon has already warned that it will deliver the slowest growth on record for any holiday shopping season when it releases results later this month thanks to the slowdown in ecommerce, while Amazon Web Services – the cloud computing unit that drives profits – is also seeing growth slow and margins squeezed.

“Importantly, Amazon’s overall workforce has more than doubled since the start of the pandemic as the company aggressively recruited to meet the surge in demand that we saw in 2020.

“But now, with growth stalling and earnings under pressure, Amazon is having to reverse this and start trimming the fat.”