Major companies will begin the largest layoffs in history
10,000 people at Amazon could be fired
Some analysts believe that Amazon’s large-scale layoffs are inseparable from the current weak global economic situation, soaring production costs, and a slowdown in e-commerce business growth. According to New York Post, Amazon plans to lay off about 10,000 employees this week. According to reports, this is the largest layoff in Amazon’s history, and the scope of layoffs includes sales, human resources, and other departments. The number of layoffs has not been finalized, but if the layoffs are 10,000, it means that 3% of Amazon’s employees will be fired. So far, Amazon has not responded.
In early November this year, Amazon said that it would stop hiring in the next few months, citing economic uncertainty and the excessive number of employees hired in recent years. It is reported that Covid-19 has made consumers prefer e-commerce platforms, and the number of Amazon employees has increased rapidly. However, Amazon’s latest report, forecast revenue that fell short of analysts’ expectations. In this regard, some analysts believe that Amazon’s large-scale layoffs are inseparable from the current weak global economic situation, soaring production costs, and a slowdown in e-commerce business growth. Amazon’s market value has fallen more than 40% since the start of the year.
In the context of the sluggish global economic situation, in addition to Amazon, freight forwarders and shipping companies have also recently started layoff plans. C.H. Robinson Worldwide has confirmed that it has laid off about 650 employees in response to the current slowdown in transportation demand and the impact of increased costs on its business.
Facebook cuts 11,000 jobs overnight
Since Musk fired half of the employees on Twitter last week, it has started a wave of layoffs in major factories. Recently, Meta CEO Mark Elliot Zuckerberg announced the news: 11,000 people lost their jobs overnight. Since this week, Meta has informed employees to cancel non-essential travel. In an internal meeting on Tuesday, the CEO revealed for the first time that the main targets of the layoffs were recruitment and business teams. He acknowledged that the layoffs were his responsibility. He said the laid-off employees are no longer able to log into Meta’s internal systems, but their emails are still available so that everyone can say goodbye.
On the workplace forum Blind, someone analyzed that this is just the beginning. Zuck’s original plan was to lay off 15-20% of its workforce in the short term. This is the current plan but may change in the future. In the long run, they will reduce the overall headcount until the end of 2023. Rachel Bonn, a marketing manager at Twitter’s San Francisco headquarters, said the layoffs came suddenly, even though she was eight months pregnant and raising a nine-month-old child. But the login permission stops shortly after.
When things turn sour, the CFO and executives go to discuss profitability versus costs. The first option is always to reduce growth costs, such as marketing spending, exiting the market, and closing offices. If these are not enough, they will start discussing ways to cut labor costs such as salary cuts. There are at least 3 rounds of cost-cutting actions initiated by the CEO or CFO. The first is a 5% cost cut by canceling contracted employment or interns. In the second act, they rank all the big projects according to the return on investment or strategic needs and set a reduction target, which may be a 5% reduction, a 90% reduction, or a total reduction. If the second wasn’t enough, the third one was a cut across the board, where everyone above the vice president was asked to cut headcount by a percentage. Vice presidents will often want to fire people who are easy to hire, such as junior people, or people who are not from a big brand company or do not have the expertise.
Experts have predicted that the United States will experience a recession next year, and news of layoffs keeps coming. Many people worry that this environment will affect their work. Bledi Taska, the chief economist, pointed out: Many layoffs are concentrated in the technology industry, giving everyone the illusion that the economic winter is coming, but don’t forget that the technology industry only accounts for a small part of the US economy. The labor market is actually much larger and generally healthy. The U.S. unemployment rate rose to 3.7% in October but remains near the lowest level in the past 50 years.
For now, looking at the U.S. economy as a whole, there are no large-scale layoffs across industries, although the latest layoffs have not yet been reflected in the latest economic data. While more layoffs are expected in the tech sector next year, other industries could also be affected. Unemployment is expected to rise during a potential recession. The Federal Reserve expects the unemployment rate to climb from 3.7% to 4.4% in 2023, and Bank of America expects it to reach 5.5% by the end of next year. Rising unemployment is painful for anyone who loses a job. However, if the forecast is accurate, unemployment will be far less severe than in the previous two recessions. As long as job openings remain plentiful, many unemployed people have the opportunity to find work elsewhere.
