A

SYNOPSIS
ON
A STUDY ON LAYOFF IN AMAZON AND HOW HR CAN TACKLE THIS

BACHELOR OF BUSINESS ADMINISTRATION

(Session 2021- 24)

TO
MAHARISHI DAYANAND UNIVERSITY
ROHTAK

D.P.G INSTITUTE OF TECHNOLOGY AND MANAGEMENT

HERO HONDA CHOWK, GURUGRAM

Submitted to: - Submitted by:-

Dr. Sapna Dadwal Neha Ghosh
Reg No:- 2112051070
 INDEX

Sr no. Name Page no.

1 About Company 1

2 Research questions 1

3 History of layoff in Amazon 2

4 Reason behind layoffs in Amazon 4

5 How HR can tackle layoffs 6

6 Conclusion 7

7 References 8
Company : Amazon
About Company:
Amazon was founded on July 5, 1994, by Jeff Bezos, who chose the Seattle area for its
abundance of technical talent, as Microsoft was in the area.
Amazon went public in May 1997. It began selling music and videos in 1998, and began
international operations by acquiring online sellers of books in the United Kingdom and
Germany. In the subsequent year, it initiated the sale of a diverse range of products, including
music, video games, consumer electronics, home improvement items, software, games, and
toys.
In 2002, it launched Amazon Web Services (AWS), which initially focused on providing APIs
for web developers to build web applications on top of Amazon's ecommerce platform. In
2004, AWS was expanded to provide website popularity statistics and web crawler data from
the Alexa Web Information Service. AWS later shifted toward providing enterprise services
with Simple Storage Service (S3) in 2006, and Elastic Compute Cloud (EC2) in 2008,
allowing companies to rent data storage and computing power from Amazon. In 2006,
Amazon also launched the Fulfilment by Amazon program, which allowed individuals and
small companies (called "third-party sellers") to sell products through Amazon's warehouses
and fulfilment infrastructure.
Amazon purchased the Whole Foods Market supermarket chain in 2017. It is the leading e-
retailer in the United States with approximately US$178 billion net sales in 2017. It has over
300 million active customer accounts globally.
Amazon saw large growth during the COVID-19 pandemic, hiring more than 100,000 staff in
the United States and Canada. Some Amazon workers in the US, France, and Italy protested
the company's decision to "run normal shifts" due to COVID-19's ease of spread in
warehouses. In Spain, the company faced legal complaints over its policies, while a group of
US Senators wrote an open letter to Bezos expressing concerns about workplace safety.
On February 2, 2021, Bezos announced that he would step down as CEO to become
executive chair of Amazon's board. The transition officially took place on July 5, 2021, with
former CEO of AWS Andy Jassy replacing him as CEO. In January 2023, Amazon cut over
18,000 jobs, primarily in consumer retail and its human resources division in an attempt to
cut costs

Research Question
1. How layoffs impact the reputation of an organization?
2. How can the HR departments of organizations play a proactive role in minimizing the
occurrence of layoffs, and subsequently reduce the negative impact on skilled
professionals?

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History of Layoff in Amazon
January 2024: In the latest round of layoffs, Amazon is laying off less than 5% of its
workforce in the Buy with Prime unit. The Buy with Prime program launched in 2022 to
equip retailers with fulfilment and delivery services.
Earlier in the month, Amazon said it would lay off several hundred employees in Prime Video
and Amazon MGM Studios. It wasn't immediately unclear when the layoffs would take place
or exactly how many people would be affected.
Additionally, the company planned to lay off 500 employees in its Twitch livestreaming
division.

November 2023: Amazon's Alexa business laid off "several hundred" employees, including
those on its recently launched artificial general intelligence team.
Amazon's VP of Alexa and Fire TV Daniel Rausch told his team about the layoffs, saying it's
intended to shift the company's resources to focus on generative AI.
Amazon Games also cut just over 180 roles, according to a memo sent to employees. As part
of the changes, the gaming division is closing its Crown Channel and Game Growth
initiatives and refocusing on Prime Gaming.

July 2023: Amazon Fresh laid off hundreds of store workers in "zone lead" roles who
manage specific sections of the grocery stores. The company told workers that the layoffs
resulted from cost cuts at the chain.

April 2023: Several hundred corporate Whole Foods employees were laid off in a
reorganization to streamline the grocer's regional and global structures.
The cuts are set to affect global support teams and employees who manage the grocery
chain's regional operations. The layoffs were part of a reorganization that would take place
over the next two months, according to a memo. A Whole Foods spokesperson said the cuts
would affect "less than half of a percent" of Whole Foods' global workforce.

March 2023: Amazon layoffs eliminated another 9,000 employees as the company continued
to cut costs.

January 2023: Amazon laid off 18,000 employees in the largest job cut in the company's
history, with most of the layoffs coming in the company's Amazon Stores and People
Experience and Technology Solutions divisions.
CEO Andy Jassy cited an "uncertain economy" and rapid hiring as reasons for the layoffs.
While most of the company's 1.5 million employees work in warehouses, the layoffs had so
far been concentrated in Amazon's corporate groups at that point.
More than 300 Zappos jobs were also cut.

November 2022: Amazon announced it would pause hiring new corporate workers for the
next few months, citing an "unusual macro-economic environment." Soon after, the company

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would lay off roughly 10,000 employees. The cuts would mainly affect Amazon's devices,
human resources, and retail divisions.

July 2018: A year after Amazon acquired Whole Foods, the grocery chain announced it
would lay off its marketing staff in a leaked conference call.

March 2017: Amazon shut down Quidsi, an e-commerce company it acquired in 2010,
because it wasn't profitable. The closure resulted in more than 260 layoffs. Quidsi was the
parent company of sites such as Diapers.com and Soap.com.
The shutdown also carried some weight for Amazon CEO Jeff Bezos and his long-time rival
Marc Lore, who founded Quidsi and was then CEO of US commerce for Walmart.
Quidsi was acquired after a vicious price war between Lore's company and Bezos' Amazon.
Eventually, Quidsi couldn't raise more investment capital, and Lore sold the company to
Amazon. Lore and his cofounder, Vinit Bharara, made a lot of money in the deal but left
Amazon in 2013, not long after their contractual mandate to work at the company once the
acquisition ended.

March 2009: Amazon closed three distribution centers in Nevada, Indiana, and
Pennsylvania, which eliminated 210 jobs.

January 2001: Amid the dot-com bubble burst and resulting economic downturn, Amazon
laid off about 1,300 employees, or 15% of its workforce, to cut costs. Although the
company's net sales were increasing over time, the first few years were hard to make a profit.

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Literature review:
A few companies have been experimenting with better ways to handle their changing
workforce needs. Take AT&T. In 2013 the company’s leaders concluded that 100,000 of its
240,000 employees were working in jobs that would no longer be relevant in a decade.
Instead of letting these employees go and hiring new talent, AT&T decided to retrain all
100,000 workers by 2020. That way, the company wouldn’t lose the knowledge the
employees had developed and wouldn’t undermine the trust in senior management that was
necessary to engagement, innovation, and performance. So far, the results seem very positive.
In a 2016 HBR article, AT&T’s chief strategy officer, John Donovan (now CEO of AT&T
Communications), noted that 18 months after the program’s inception, the company had
decreased its product development cycle time by 40% and accelerated its time to revenue by
32%. Since 2013, its revenue has increased by 27%, and in 2017 AT&T even made Fortune’s
100 Best Companies to Work For list for the first time.
In her work, Sandra has studied seven companies that, like AT&T, have successfully pursued
alternatives to traditional layoffs. An analysis of their experiences reveals that an effective
workforce change strategy has three main components: a philosophy, a method, and options
for a variety of economic conditions.
The company also has a defined approach to workforce change and restructuring. Michelin’s
labour relations policy described it like this in 2013:
Restructures are inevitable in certain circumstances in order to maintain the company’s global
competitiveness. These restructures must, as far as possible, take place at times when the
company’s health allows mobilization of adequate resources to attenuate the social
consequences. Whenever possible, staff at the entities concerned and their representatives are
invited to work together to seek and suggest solutions for restoring competitiveness and
reducing overcapacity, which may open up an alternative to closing an activity or site. When
restructuring is unavoidable, it must be announced as soon as possible and carried out
according to the procedures negotiated with the staff representatives. The ensuing changes on
a personal level must be supported for as long as is necessary to ensure that the reclassified
employees find a satisfactory solution in terms of standard of living, stability, family life and
self-esteem.

Research methodology:
Layoff: Observations where the firm had a layoff in a given year were identified using a
variable set to one when a layoff announcement was reported in the Wall Street Journal
abstracts. Wall Street Journal abstracts were searched using a broad set of terms (layoffs, job
cuts, downsizing, or restructuring) for the years 2011 to 2023. The abstract of each article was
examined for evidence of a layoff announcement. The announced layoffs were then compared
to the list of firms in the Fortune database. For each layoff by a firm in the For -tune
database, the layoff variable is coded as one for that year.

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Prior performance: Performance is measured as industry-adjusted return on assets (ROA) the
year before the observation year. Industry-adjusted ROA has been the most commonly used
performance measure in the literature. Returns and assets values were obtained.
Firm age: Age was calculated by subtracting the date of founding for each firm from the
observation year. Founding dates were obtained from Standard and Poor’ Register of
Corporations. Organisational size. The size of firms is measured as the industry-adjusted log
of sales.
Control Variables : To account for movements in performance and firm size over time, we
also included ROA and the log of sales in the observation year. Thus, our model has both
contemporaneous and lagged values of ROA and organizational size.
This study also sheds some additional light on characteristics of the Fortune reputation
database. We find that layoffs affect each of the eight Fortune reputation dimensions in very
similar ways. This supports the notion proposed by Shanley that the eight dimensions are
empirically indistinguishable from each other and really reflect one underlying dimension of
reputation. The only statistical difference we could find when using various components of
reputation as dependent variables was for the community/ environmental responsibility
component. Although layoffs still had a significant, negative impact on this measure, the
impact was not as large (less negative) than that found when an index of the other seven
measures was used as a dependent variable. Our results may lend some support to their
position. It could be, for instance, that a layoff involving the closing of an old plant could be
viewed as having a negative impact on a community but a less negative or even a positive
impact on the environment. Thus, it may not be surprising that, although we find that the
overall impact of a layoff on a firm’s community/environment rating is negative, the impact
is not as strong as that found for other components of reputation. A few limitations of our
study are notable. First, our reputation measure, although the best measure generally
available, may miss some of the elements of reputation. For example, the influence layoffs
might have on the firm’s reputation with stakeholders such as potential employees or
customers is not fully captured by the Fortune measure. Second, although we examined a few
contextual variables that might moderate the relationship between layoffs and performance,
there are certainly a number of other attributes of layoffs that would be important for future
research to consider.

Some reasons behind layoff:

1. Business Restructuring: Companies may undergo organizational restructuring to adapt to
changing market conditions, streamline operations, or reallocate resources. This can result in
workforce adjustments, including layoffs.
2. Efficiency and Cost-Cutting: Companies may implement cost-cutting measures to improve
efficiency and maintain competitiveness. Workforce reductions can be a part of these
measures, especially during economic downturns or periods of financial pressure.

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3. Automation and Technological Changes: If there are significant technological
advancements or increased automation in certain business processes, companies may need to
adjust their workforce to align with new technologies and reduce roles that are becoming
obsolete.
4. Market Dynamics: Changes in consumer behaviour, market trends, or shifts in demand for
specific products or services can influence a company's staffing needs. Layoffs may occur as
a response to these changes.
5. Mergers and Acquisitions: In the context of mergers or acquisitions, redundancies in job
roles or departments may lead to layoffs as the combined entity seeks to optimize its
workforce.
6. Business Strategy Shifts: Changes in the overall business strategy or the exit from certain
markets or business segments may result in the need for workforce adjustments, including
layoffs.

How HR can help to tackle layoff?

1. Communication and Transparency:
- HR should facilitate open and transparent communication between the management and
employees regarding the reasons for layoffs, the criteria for selection, and the overall impact
on the organization.
- Providing clear and honest information helps build trust and minimizes uncertainty among
the remaining workforce.

2. Developing Fair Criteria:

- HR can work with management to establish fair and objective criteria for selecting
employees for layoffs. Criteria may include performance evaluations, skills relevancy, or
other job-related factors.
- Ensuring fairness in the selection process can mitigate potential legal issues and maintain
morale among the workforce.

3. Providing Support Services:

- HR can offer support services to affected employees, such as counselling, career transition
assistance, and access to resources for job search and skill development.
- Implementing outplacement services demonstrates the organization's commitment to
helping employee transition smoothly.

4. Legal Compliance:
- HR professionals need to be well-versed in employment laws and regulations to ensure
that the layoff process complies with legal requirements.
- This includes providing appropriate notice periods, adhering to labor laws, and handling
severance packages in accordance with legal standards.

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5. Retaining Key Talent:
- HR can work with management to identify and retain key talent critical to the
organization's success. This may involve restructuring roles, offering incentives, or retraining
employees to match evolving job requirements.

6. Employee Morale and Well-being:

- HR should actively address the emotional and psychological impact of layoffs on the
remaining workforce. This may involve organizing team-building activities, communication
forums, or counselling services to boost morale.
- Implementing measures to maintain a positive workplace culture is essential during
challenging times.

7. Reviewing and Improving Processes:

- HR can conduct post-layoff assessments to review the effectiveness of the process.
Feedback from employees and managers can help identify areas for improvement in future
workforce management strategies.

8. Strategic Workforce Planning:

- HR professionals can play a proactive role in strategic workforce planning to anticipate
and mitigate potential future layoffs. This involves staying informed about industry trends,
technological advancements, and market dynamics.

Conclusion:
In conclusion, the role of Human Resources (HR) in navigating and addressing layoffs is
pivotal in shaping the overall impact on both employees and the organization. HR
professionals play a multifaceted role, encompassing strategic planning, effective
communication, and compassionate support during challenging times.
By adopting proactive strategies, HR can contribute significantly to minimizing the need for
layoffs through workforce planning, skill development, and fostering a flexible and adaptable
organizational culture. In the unfortunate event that layoffs are necessary, HR becomes
instrumental in ensuring a fair and transparent process, upholding legal compliance, and
providing essential support services for affected employees.
The success of HR in tackling layoffs lies in its ability to balance the business's operational
needs with a commitment to employee well-being. Open communication channels,
transparent decision-making, and the implementation of retention incentives can help
maintain morale and trust within the remaining workforce.
Furthermore, ongoing initiatives such as employee engagement programs, internal mobility
opportunities, and continuous skill development contribute to a resilient workforce that can
weather uncertainties. HR's role extends beyond crisis management; it involves strategic
workforce planning to anticipate challenges and position the organization for long-term
success.

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References:
1. https://economictimes.indiatimes.com/tech/technology/amazon-lays-off-employees-
in-india-across-functions/articleshow/100258005.cms?from=mdr
2. "Lean HR: From HR Hero to Successful HR Leader" by Cheryl M. Jekiel
3. https://www.geekwire.com/2023/the-end-of-everything-at-amazon-record-layoffs-
signal-new-mindset-for-sprawling-tech-giant/
4. "The Art of HR: Managing Talent in an Age of Uncertainty" by Nancy R. Lockwood
5. https://www.forbes.com/sites/dereksaul/2023/10/05/layoffs-are-up-almost-200-so-far-
in-2023-these-industries-hit-hardest/?sh=543588b41953
6. Allison, P. D. 1990. Change scores as dependent variables in regression analysis. In C.
Clogg (Ed.), Sociological meth-odology: 93-114. Oxford, UK: Basil Blackwell.
7. Amabile, T. M., & Conti, R. 1999. Changes in the work environment for creativity
during downsizing. Academy ofManagement Journal, 42: 630-641
8. Brockner, J. 1988. The effects of work layoffs on survivors:Research, theory and
practice. Research in OrganisationalBehaviour, 10: 213-255
9. Carroll, C. E., & McCombs, M. 2003. Agenda-setting effects of business news on the
public’s images and opinionsabout major corporations. Corporate Reputation Review,
6(1): 36-56