According to a report from The New York Times, Amazon will lay off approximately 10,000 employees in human resources, retail, and devices divisions as soon as this week. The layoffs occur amid cost-cutting measures, according to an adjacent report from The Wall Street Journal.
The cuts also come two weeks after Amazon Senior Vice President of People Experience and Technology Beth Galetti informed employees that the e-commerce giant would institute a freeze on incremental hires in the corporate workforce. “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,” she remarked.
Several technology companies, including Microsoft, Tesla, and Coinbase, already announced hiring pauses or layoffs earlier this year. Although many of the dismissals were attributed to the state of the economy, prominent investors have argued that technology firms’ payrolls are bloated, a reality which led Twitter CEO Elon Musk to cut the company’s headcount in half.
FedEx Freight is preparing to furlough an unspecified number of drivers beginning in early December, according to a report from Freight Waves. Employees can opt into the voluntary furlough, slated to last for three months, and continue receiving healthcare benefits. In addition, workers are eligible to file for state unemployment insurance, while some will be offered transfers to markets with greater hiring needs.
“Because of our previous experience with furlough and with the incentives we are offering, we are expecting employees to volunteer to meet the business need,” FedEx Freight spokesperson Miranda Yarbro said in a statement. The business unit, which handles less-than-truckload freight needs for FedEx, currently employs 45,000 people and has outperformed the company’s other transport business subsidiaries, FedEx Express and FedEx Ground.
Shares in FedEx have declined 31% since the beginning of the year, while shares in Amazon have plummeted 41%. The Dow Jones Industrial Average fell 7.6% over the same period, while the technology-heavy NASDAQ fell 27.5%.
The layoffs from both Amazon and FedEx are troubling, given that they occur shortly ahead of the holiday season. Supply chain bottlenecks and rising price levels, among other phenomena, are currently worsening global economic conditions.
Holiday retail sales in the United States are expected to grow between 6% and 8% since last year to possibly surpass $960 billion, according to data from the National Retail Federation. Although the growth appears to surpass the average 4.9% annual increase witnessed over the past decade, the expansion will be mostly eclipsed by inflation, which rose year-over-year at a 7.7% rate as of last month, according to a report from the Bureau of Labor Statistics.
“While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce,” National Retail Federation CEO Matthew Shay said in a press release. “In the face of these challenges, many households will supplement spending with savings and credit to provide a cushion and result in a positive holiday season.”
With respect to non-store and online sales, the National Retail Foundation estimates increases between 10% and 12% as consumers grow in their reliance upon online shopping. Some consumers, however, will return to traditional in-store experiences.