Amazon prepares to make about 10,000 job cuts

to corporate workforce

Pearson asset library: AL1483615

Amazon is planning to cut about 10,000 jobs from its corporate workforce as part of its effort
to cut loose loss making or underperforming units of its business, a person familiar with its
plans said. The person said the precise number had yet to be finalised.

A cut of about 10,000 jobs would represent around 3% of Amazon’s corporate workforce. It
comes as part of a review into the ecommerce and cloud group’s performance, led by chief
executive Andy Jassy. Last week it was confirmed that Amazon’s unit behind voice assistant
Alexa was among those being analysed for cost savings.

The person said job cuts were being assessed on a “team by team” basis, with the first
firings potentially happening as soon as this week. The culling would be the largest in
Amazon’s history, and in the same ballpark as recent sweeping reductions at other
technology companies as they grapple with tumbling share prices.

Last week, Facebook parent Meta said it would shed 11,000 roles, representing about 13%
of the company. Amazon’s workforce most recently stood at about 1.5mn, though the vast
majority are frontline employees at its warehouses and other logistics facilities. While that
employee base fluctuates with seasonal demand — and doubled during the coronavirus
pandemic — corporate lay-offs have been rare.

The planned cuts come as Amazon faces soaring costs and slowing growth in its online
stores business. Earlier this month, Beth Galetti, Amazon’s head of human resources, said a
hiring “pause” would be put in place for at least the “next few months”.

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(Adapted from the article in the Financial Times by Dave Lee on 14th November 2022
https://www.ft.com/content/19cb5d06-f60e-41a3-aab6-0fcc060e2604)

Pearson Edexcel GCSE (9-1) Business

This case study relates to the following topic areas of the course specification:
1.5.4 The economy and business
2.1.2 Changes in business aims and objectives
2.4.2 Understanding business performance
2.5.2 Effective recruitment

Recommended research activities:

1. Read the article https://www.ft.com/content/348068b1-24d9-434b-9ae7-
6599027bf84f about Facebook’s job cuts, are the two linked?
2. What does ‘seasonal demand’ mean and how will it affect recruitment at a
business like Amazon?
3. Research the article “tags” linked to the article on the FT site.

Exam style questions:

1. Identify a stakeholder group who is likely to be unhappy with the job cuts (1 mark)
2. Outline one benefit to Amazon of cutting 10,000 jobs (2 marks)
3. Analyse the impact the pandemic had on staffing levels at Amazon (6 marks)
4. Evaluate if Amazon is likely to benefit from the ‘hiring pause’ (12 marks)

Students aged 16-19, their teachers and schools around the world can read FT.com
for free. Sign up or check if you are registered at www.ft.com/schoolsarefree