Amazon is planning to lay off 10,000 employees, reported the New York Times.

Amazon is planning to lay off 10,000 employees, reported the New York Times. The news comes amidst reductions across tech companies; Meta, Snap, and Twitter all laying off employees this quarter. The layoffs will be primarily in the retail, corporate and tech divisions of Amazon, including the Alexa and the Luna cloud gaming unit.

Tech companies are struggling with an economic bust after the boom of the pandemic, which increased revenue. During the pandemic Amazon’s online sales increased by 57% and their Prime Video became the second fastest-growing streaming service in the US. Amazon Web Services (AWS) had a 50% increase in sales too. To meet the increased demand of the pandemic, Amazon hired 476,000 employees between the end of 2020 and the start of 2022.

But now, the impacts of a worldwide economic downturn are hitting tech companies. The whole tech industry relieved 9,500 jobs last month, the highest figure since November 2020. As well as reduced sales after the pandemic increase, ad sales are also slumping. Tortoise Media reports overall ad spending was down 5% this September compared with the year before, in a four-month downward trend. 

Shares of Amazon have lost more than 40% of their value this year, down 1.1% at $99.67 on Monday afternoon. In a call with reporters last month, Amazon CFO Brian Olsavsky said the company saw signs of a tighter household budget for shopping, and the company continues to wrestle with high inflation and energy costs, according to Reuters. The company has also said it would freeze corporate hiring for several months. The Wall Street Journal also reported that Amazon’s devices unit in some recent years has posted an annual operating loss of over $5bn.

Warnings From Bezos

Amazon founder Jeff Bezos warned of the challenges of an economic recession. In an interview with CNN, he urged consumers and small business owners to reduce their risk by hanging onto cash and delaying big purchases. 

“The probabilities say if we’re not in a recession right now, we’re likely to be in one very soon. My advice to people whether they’re small business owners is take some risk off the table. If you were going to make a purchase, maybe slow down that purchase a little bit. Keep some dry powder on hand and wait a bit,” he said.

He added, “What I can tell you is the economy does not look great right now, things are slowing down, you’re seeing layoffs in many many sectors of the economy, people are slowing down.”

“Hope for the best, but prepare for the worst.”

Bezos also announced that he and his partner, Lauren Sanchez, plan to give away the “majority” of a $124bn fortune. He said to CNN that he wants to use his wealth to fight climate change and support societal “unifiers”. Starting with, as part of his announcement, giving $100 million to singer Dolly Parton to be disbursed to charities of her choice. He did not offer many specifics of his plan, other than the focus being to give generously to individuals who work to “fight division” in American politics and public life.

Many are praising Bezos for his charitable announcement. However, a closer analysis of the lifestyle of a billionaire shows that, when it comes to climate change, they are key contributors. In 2021, The Conversation found that billionaires have carbon footprints that can be thousands of times higher than the carbon footprint of the average American. The elite’s ownerships of yachts, private plans and multiple housing estates significantly contribute greenhouse gases to the environment. For example, “a superyacht with a permanent crew, helicopter pad, submarines and pools emits about 7,020 tons of CO2 a year, according to our calculations, making it by far the worst asset to own from an environmental standpoint”, the article reads. 

The Conversation combined 82 databases of public records to document billionaire’s housing, vehicles, aircraft and yachts, starting with 20 billionaires whose possessions they were able to ascertain. They did not calculate each asset’s “embodied carbon” emissions (how much CO2 is burned throughout the supply chain in making products), or the emissions by their family, household employees or entourage. If such things could be calculated, it would likely grow Bezos’ individual footprint even more. Bezos even owns a piece of the ocean; his “14-acre property on La Pérouse Bay in Makena includes the remains of a Hawaiian fishpond, allowing Bezos to own a piece of the ocean”, reports the Maui Times. The property was valued at $46 million in 2021. 

As far as donating wealth to charities or individuals, the announcement has a bitter taste to it given the news of mass Amazon layoffs during an economic crisis, the longstanding poor conditions of Amazon workers, and reports last month about the treatment of his home staff. Amazon workers make as little as $15.30 per hour and lost pandemic hazard pay after three months.

A report by The Institute for Local Self-Reliance and Jobs With Justice stated that Amazon runs its warehouses and employees like a machine. “The work is often dehumanising, and includes dashing across massive warehouses, frequent kneeling and bending, and dangerously high production quotas,” it reads, as well as noting that in 2016 Amazon was fined by federal regulators for not recording employee injuries, including severe ones. Another report by the Strategic Organising Centre details the worsening conditions amidst the pandemic.  The key findings were:

• In 2020, for every 100 Amazon warehouse workers there were 5.9 serious injuries requiring the worker to either miss work entirely (lost time) or be placed on light or restricted duty (light duty). 

• This rate is nearly 80 percent higher than the serious injury rate for all other employers in the warehousing industry in 2020.

• In 2020 Amazon workers who experienced lost-time injuries were forced off work for an average of 46.3 days – more than a month and a half. 

• That is a week longer than the average recovery time for workers injured in the general warehouse industry and more than two weeks longer than the recovery time for the average worker who suffered a lost time injury.

• In 2020, Amazon’s overall warehouse injury rate was over twice that of Walmart, with the severe injury rate more than two and a half times Walmart.

Bezos has also recently been sued by a former housekeeper who was allegedly subjected to racial discrimination and forced to regularly climb out of a laundry room window to go to the toilet as she wasn’t allowed to enter the Amazon billionaire’s house except on “cleaning assignment”. Working in Bezos’ Seattle mansion, she claimed hispanic staff were treated differently to white staff, claiming the household manager “became aggressive and abusive” towards her while being “respectful and polite” towards white groundskeepers.” She also said she was required to work 10 to 14 hours without rest or lunch breaks if Bezos and his family were in residence. She has filed a lawsuit in Seattle state court. The lawsuit claims that there was no dedicated break room or rest area and that the household staff would regularly eat in the laundry room. The housekeeper is suing Bezos personally, along with Zefram and Northwestern, the companies that manage his interests and properties.

So, whilst Bezos braces his company against economic downturns, less consumer spending and high inflation, many of his employees and now ex-employees do not have the same protections. 

(Sources: Reuters, Tortoise Media, CNBC, CNN, The Conservation, Strategic Organising Centre, The Guardian)