Amazon Pauses Corporate Workforce Hiring

More bad news on the jobs front after Amazon said it is pausing hiring for roles in its corporate workforce.

The e-commerce and cloud giant announced the corporate hiring freeze in a memo to staff Thursday.

It comes after Amazon had already announced last month that it would freeze hiring for corporate roles in its retail business. This week’s announcement impacts Amazon’s other businesses, such as Amazon Web Services (AWS).

Hiring freeze

“With the economy in an uncertain place and in light of how many people we have hired in the last few years, Andy and S-team decided this week to pause on new incremental hires in our corporate workforce,” wrote Amazon’s senior VP of People Experience and Technology, Beth Galetti.

“We had already done so in a few of our businesses in recent weeks and have added our other businesses to this approach,” wrote Galetti. “We anticipate keeping this pause in place for the next few months, and will continue to monitor what we’re seeing in the economy and the business to adjust as we think makes sense.”

Galetti said that depending on the business or area of the company, Amazon will hire backfills to replace employees who move on to new opportunities.

She also wrote that there are some targeted places where Amazon will continue to hire people incrementally.

“We’re facing an unusual macro-economic environment, and want to balance our hiring and investments with being thoughtful about this economy,” wrote Galetti. “This is not the first time that we’ve faced uncertain and challenging economies in our past. While we have had several years where we’ve expanded our headcount broadly, there have also been several years where we’ve tightened our belt and were more streamlined in how many people we added.”

“With fewer people to hire this moment, this should give each team an opportunity to further prioritize what matters most to customers and the business, and to be more productive,” she wrote.

“We still intend to hire a meaningful number of people in 2023, and remain excited about our significant investments in our larger businesses, as well as newer initiatives like Prime Video, Alexa, Grocery, Kuiper, Zoox, and Healthcare,” she added.

Cost cutting

CEO Andy Jassy cutting costs at Amazon by ending some projects and shedding warehouse space, after the firm went on a hiring spree during the Covid-19 pandemic, as it sought to keep pace with a online shopping surge during global lockdowns.

Late last week, Amazon posted mixed Q3 results after revenues for the three month period missed Wall Street expectations.

It posted a decline in Q3 profits down to $2.9 billion from $4.9bn in the same year ago quarter. However revenue was up 15 percent to $127.1bn.

But Amazon forecast its revenue for the holiday quarter would be less than analysts had expected, causing its stock to fall sharply.

Shares of Amazon are down more than 45 percent this year.

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 retain workers).

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

Amazon’s move to increase the wages of its US workforce came 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.

Amazon has reportedly closed nearly all of its US call centres in a bid to save on real estate.