There were fears for Irish jobs with technology giant Amazon as the company confirmed it would cut an additional 9,000 roles from its global workforce.
But staff here will have to wait a number of weeks to find out if they are affected as the company continues to finalise plans. Amazon expects to have that work completed by the end of April.
In a message to employees, chief executive Andy Jassy said the cuts would be primarily in its web services division, advertising, human resources and its Twitch streaming division.
Amazon employs abpit 5,000 people in Ireland, with the majority of those in its Amazon Web Services (AWS) unit. The company opened its first Irish “fulfilment centre” in Baldonnell in September, creating about 500 jobs.
The company, which employed about 1.5 million people globally before the job cuts began, has already cut 18,000 jobs as the retailer grappled with slowing online sales growth and braced for a possible recession affecting the spending power of its customers. The Irish workforce has largely escaped the job cuts that Amazon has made until now, but with AWS set to lose staff, that may change.
“This was a difficult decision, but one that we think is best for the company long term,” Mr Jassy said in his message to staff.
“For several years leading up to this one, most of our businesses added a significant amount of headcount. This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
Mr Jassy said decisions on priorities for the business had led to some reductions, although there would be limited hiring in strategic areas where the company had decided to allocate more resources. He said the impacted teams had not yet finished making final decisions on which roles would be impacted.
“Once those decisions have been made (our goal is to have this complete by mid to late April), we will communicate with the impacted employees (or where applicable in Europe, with employee representative bodies),” he said, pledging to support affected employees with financial settlements, transitional health insurance benefits and jobs placement support.
“I remain very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, Stores and AWS, and our newer customer experiences and businesses in which we’re investing,” Mr Jassy said.
Other tech companies have also been forced to announce a second round of job cuts as the sector continued to be hit by economic uncertainty. Meta announced last week that it would cut an additional 10,000 jobs from its workforce globally, following last year’s 11,000 reduction.
The move comes after Amazon, which has its headquarters in Seattle, paused construction on a new headquarters in Virginia, pulled back from launching new physical grocery stores and closed warehouses across the UK in recent months.
Like other tech groups, Amazon hired extensively in recent years to meet stronger demand for its services from locked down customers during the height of the pandemic. This expansion “made sense given what was happening in our businesses and the economy as a whole”, Jassy said.
Higher interest rates and a downturn in consumer spending power have forced tech companies to trim spending, with almost 140,000 lay-offs by tech groups in 2023, compared with 161,000 in the entirety of 2022, according to Layoffs.fyi, a website that tracks lay-offs in the sector.
Investors have been rewarding tech groups for cutting jobs, with the share prices of Meta, Alphabet, Amazon and Microsoft rising since the start of 2023.
But those efficiency measures have come at a price. Those four big tech groups have revealed that they had collectively incurred more than $10 billion (€9.3 billion) in charges related to mass redundancies and other cost-cutting moves.
Amazon began trimming its headcount in November, starting with a “voluntary severance” programme. In January it announced it was cutting 18,000 jobs. Its share price has risen 14 per cent this year, taking the company’s valuation to more than $1 trillion. Amazon stock fell 1.5 per cent in morning trading on Monday.
Mr Jassy said cuts were being announced in stages as teams completed internal analyses, adding that final decisions will be made by mid-April.
Amazon spent $640 million on severance in the fourth quarter of 2022, as well as an additional $720 million on abandoning real estate projects. – Additional reporting The Financial Times