Amazon Freezes Corporate Hiring For Retail Operation

Amazon has confirmed a media report that it is freezing hiring for corporate roles in its retail business.

On Tuesday the New York Times reported the hiring freeze, and Amazon then confirmed the accuracy of the report to CNBC.

The development does not include delivery and warehouse workers, and comes as many big name tech firms announce layoffs, hiring freezes or cost cutting moves, amid fears about the global economy.

Amazon hiring

According to New York Times article, which cited internal communications, Amazon instructed recruiters to close all open job postings for those roles in the coming days, and recommended they cancel some recruiting activities, such as phone calls to screen new candidates.

Amazon spokesperson Brad Glasser reportedly said the retail giant continues to have a significant number of open roles across the company.

“We have many different businesses at various stages of evolution, and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures,” Glasser said in a statement.

The move comes as Amazon CEO Andy Jassy seeks to rein in costs as the company grapples with slowing growth in its core retail business, which still accounts for the lion’s share of Amazon’s revenue.

Retail (consumer) sales had surged during the Covid-19 pandemic, as consumers stayed at home and avoided physical shops, and turned to online retailers.

Cost cutting

But by early 2022, e-commerce spending began to decelerate, and Amazon in the first quarter reported its slowest rate of revenue growth since the dot-com bust in 2001.

It also posted its first quarterly net loss since 2015.

Things did not get much better in the second quarter.

In July Amazon posted its second straight quarterly loss after a $3.9 billion write down of its investment in Rivian Automotive.

It is clear that Amazon is contending with supply chain issues, inflationary pressures, higher fuel prices, and higher wages (in order to attract and keep workers).

Last week Amazon announced pay increases for front-line employees in America, starting in October.

The average starting pay for warehouse workers and delivery drivers is now more than $19 per hour in the United States (from $18 per hour), along with a new benefit that provides instant, free access to a salary at any time during the month.

Amazon’s move to increase the wages of its US workforce comes as it seeks to address high staff turnover levels. Indeed, so serious is the staff turnover issue, that a leaked internal memo in July suggested that Amazon could deplete the US labour supply by 2024.

In recent months, Amazon has closed or cancelled the launch of new facilities, and it is delaying the opening of some new buildings after its expansion during the pandemic left it with too much warehouse space.

Bloomberg reported that Amazon has also closed nearly all of its US call centres in a bid to save on real estate.

Price rises

Amazon has also undertaken a number of other measures.

In April this year it passed its rising costs etc onto third-party sellers that utilise the Amazon fulfilment services.

Then in July it raised the cost its Prime Service in the UK and Ireland, after raising the price in the US earlier in the year.

According to CNBC Amazon is also contending with too many workers after it went on a pandemic hiring spree. In the second quarter, Amazon trimmed its headcount by 99,000 people to 1.52 million employees.

In an effort to drum up more sales, Amazon has announced a second Amazon Prime Day in 2022.

The first took place in July, but the second Prime Day will take on 11 and 12 October.