AMZN: Amazon Prepares for a Second Round of Layoffs Amid Fears of a Recession

Currently, big tech is facing a problem. During the pandemic, businesses in the sector engaged in a massive hiring spree. And now that covid is, for the most part, in the rearview mirror, the same companies are struggling to remain profitable in the face of an impending recession, and layoffs were the most obvious way to reduce their operating expenses. Now, it appears that one round of layoffs was insufficient for some.

Amazon doubles down

The online retail behemoth has announced yet another round of layoffs that will affect an additional 9,000 employees. The company already announced massive layoffs in November, but this time the company's cloud and advertising units – two of its most profitable divisions – will be targeted. This brings the total number of Amazon employees laid off over the past few months to 27,000. Given that Amazon's share price is down 38% year-over-year and its profit margins have been hovering around 0% for several quarters, the news may come as less of a surprise.

Phase Two

Amazon is not the only company preparing for the possibility of a recession this year. Meta, Google, and Microsoft are employing the same strategy as Amazon to streamline their operations in the face of economic uncertainty. Just last week, Meta announced its second round of layoffs, which will result in the termination of an additional 10,000 employees. Andy Jassy, the chief executive officer of Amazon, says he remains "optimistic" despite the fact that there does not appear to be much cause for optimism in the markets at present.