Amazon is joining other large companies in cutting back on costs, divisions, and employees.
- The last year has been hard on many businesses as inflation has taken over and is even playing out in one of the world’s largest companies—Amazon.
- Amazon has decided to start cutting back on costs and slowing down business divisions that aren’t generating sufficient revenue—including the company’s Alexa device division, which has been losing around $5 billion each year.
- Along with the cost cutting, the giant retail company has also been scaling back on hiring new employees within the company and moving current employees elsewhere.
- This is a major reversal for a company that typically hires an additional 125,000 workers this time of year to stay on track with holiday packages.
Why it’s news
Over the last year many people and businesses have had to cut back off cost spending including some of the largest businesses.
In relation to that many businesses have had to cut back on employees to save money and that goes for the retail giant Amazon as well.
Amazon CEO Andy Jassy has started a cost-cutting review to look at all of the business under the Amazon umbrella and cut back on the ones that aren’t turning profit.
Under the review Amazon’s Alexa business is being looked at as the voice assistant system hasn’t been bringing in as much money as hoped. Alexa’s business has over 10,000 employees and is a major recipient of investment capital—but in recent years has had an operating loss of more than $5 billion a year, according to people close to the matter.
Amazon is also looking at other non-profitable divisions within the company and telling employees in those parts to look for jobs in other divisions as theirs was being shut down for a short period or possibly indefinitely.
“Our senior leadership team regularly reviews our investment outlook and financial performance, including as part of our annual operating plan review,” says an Amazon spokesman. “As part of this year’s review, we’re of course taking into account the current macro-environment and considering opportunities to optimize costs.”
Not only is Amazon cutting back on cost spending, but the retail giant has also put a recent pause on hiring new employees.
The company has told employees that it will be freezing hiring for now and encouraged employees in divisions being shut down to move to jobs in the more popular divisions.
“In general, depending on the business or area of the company, we will hire backfills to replace employees who move on to new opportunities, and there are some targeted places where we will continue to hire people incrementally,” says executive Beth Galetti.