Boom times end for US tech industry
Uncertain environment
Amazon has said that layoffs have begun at the company, but it didn't state the number of employees affected. The company attributed the job cuts to an "unusual and uncertain macroeconomic environment" forcing it to prioritize what matters most to customers.
The online retail and cloud computing giant plans to lay off some 10,000 employees in corporate and technology jobs, The New York Times and The Wall Street Journal reported. The job cuts would focus on the company's devices organization, retail division and human resources.
As of this autumn, Amazon employed more than 1.5 million full- and part-time workers globally, many of them in warehouses.
According to The New York Times, the 10,000 expected layoffs would comprise about 3 percent of Amazon's corporate employees and a significantly smaller share of its overall workforce.
In Seattle, home to Amazon in Washington state, the layoffs have ended the tech sector's unstoppable momentum that many took for granted just a year ago.
Anneliese Vance-Sherman, an Employment Security Department regional economist who covers the jobs market in the Seattle area, told The Seattle Times, "It's not necessarily surprising that some of that demand has diminished and wasn't necessarily sustainable in the long run."
The cuts announced so far represent only a tiny fraction of the region's tech workforce. State data show more than 160,000 workers at companies in the Seattle area and more than 190,000 statewide work at companies focused on information technology.
Jacob Vigdor, an economist at the University of Washington Evans School of Public Policy who follows state and local job markets, said that as of last year, Amazon had about 75,000 workers in the Seattle area, up from 53,500 in 2019.
"The most amazing thing about the Amazon layoff (report) is how small that number looks in relation to what has become the company's gargantuan size, and its rapid growth," he told the Seattle Times. Vigdor said that even if all 10,000 of Amazon's reported layoffs were confined to Washington state, "it would only be taking their local employment headcount back about a year or so".
Megan Slabinski, who oversees regional hiring for technology, marketing and creative roles at the Seattle office of recruiter Robert Half, said the current layoffs have grabbed a lot of attention because they are at "companies that you traditionally associate as a bellwether of the tech industry — but the tech industry has expanded far beyond those tech giants".
MetaPlatforms took on more than 15,000 people in the first nine months of this year. It fired 11,000 earlier this month, about 13 percent of its staff members.
Some executives announcing cuts have said they miscalculated.
"I got this wrong, and I take responsibility for that," Zuckerberg wrote in a letter to staff members.
The layoffs come as Facebook has invested billions in the Metaverse — pitched as a virtual-reality future in which people will work, mingle, exercise and go to concerts. But this is an unproven bet on the future, and not everyone is convinced it should be the social media company's focus.
Connel Fullenkamp, an economics professor at Duke University, said many layoffs are being carried out by companies correcting the mistakes they made in transitioning out of the pandemic.
Shortly after closing his $44 billion purchase of Twitter late last month, the company's chief Elon Musk shed about 3,700 employees, according to internal communications viewed by CNBC. This is about half the workforce.
Musk said in a post on Nov 4 there was "no choice" but to lay off employees, adding that they were offered three months' severance.
He said the layoffs come as Twitter is losing more than $4 million per day. In the second quarter, the last time Twitter reported earnings, revenue fell by 1 percent from a year earlier.
