Amazon plans to lay off 10,000 employees in “corporate and technology” around the world, The New York Times reported on Monday. Meta, which laid off more than 11,000 employees last week, follows a spate of layoffs and hiring freezes across the technology sector, most notably.
What’s driving this decline in big tech?
As the world recovers from the Covid-19 pandemic, the main reason is lower demand. Pandemic-induced lockdowns have forced people indoors and forced them to shop more online, spend more time on social media sites, consume more streaming content and play games with others, which is almost over. This has started to show in the number of tech companies hiring to keep up with the booming demand over the past few years.
As people return to offices and rediscover the outdoors, engagement on sites declines, along with revenue. As a result, fewer people are needed to manage these sites.
Companies that thought the epidemic pump would continue due to changed user behavior have realized that this is not the case.
To make matters worse, there are indicators that a global recession has begun and is already hitting demand for non-essential products in many markets. Deferrable purchases are often postponed.
But why is Amazon laying off employees so significant?
In terms of workers, Amazon is one of the most sustainable employers in tech. The layoffs, which Amazon has yet to officially announce, would be the largest in the company’s history.
Amazon’s downsizing is a signal that consumer sentiment is low, especially in the weeks before the holiday season, which is typically the best time of year for e-commerce.