Not long after warning of a slowdown around what is usually a busy holiday season, Amazon has become the latest company to cut jobs to brace for a potential economic downturn.
What happened: Amazon (-2.28%) plans to lay off as many as 10,000 employees in corporate and technology roles beginning as soon as this week, according to The New York Times.
- The layoffs will reportedly target the devices organization—which develops the famous voice-assistant Alexa—along with the retail and human resources divisions.
- Alexa will likely have to stick to being an alarm clock and weatherwoman for now, considering the unit lost more than $5 billion a year trying to add new capabilities.
If you feel like you read this story last week, and the week before that, it’s because many companies (especially ones that exploded from the pandemic) are facing a similar reckoning.
- Twitter, Meta, Stripe, Salesforce, Lyft, Wealthsimple, Clearco and a growing list of smaller companies have all laid off double-digit percentages of their workers.
- “Hire engineers, hire engineers, hire engineers, and then suddenly companies get a cold bucket of water in their face,” one tech analyst told The Washington Post.
Why it matters: The job cuts happening left, right, and centre confirm that the tech-fuelled bull market is over, with some experts drawing comparisons with the 2000s dot-com crash.
Zoom out: If a recession does materialize, the pullback in the amount of wealth built over the last ten years in a booming tech market will likely spill over to other parts of the economy.