Amazon has been a disruptive force in the retail sector, driving many retailers — large and small — to the edge of failure. Oh god, is the sinner ever going to pay for these actions?
Many believe the latest report by Seattle Times is first jolt of “God’s wrath,” probably the first ever for the company. According to the report, the e-commerce major is planning to lay off hundreds of corporate employees from its headquarters situated in Seattle, after years of magnetic absorption.
Looking deep into the reality of numbers, the layoff of a few hundred people within a corporate that employs over half a million worldwide is not such a big deal. The Seattle office itself seats around 40,000 employees. Though the latest report can only be viewed as a bull’s stumble, a break in pace is a strange habit when it comes to Amazon.
Though the latest report can only be viewed as a bull’s stumble, a break in pace is a strange habit when it comes to Amazon.
Rich man’s woes
The job cuts are happening in Amazon’s retail segment, which is under the shadow of anti-trust authorities for being too big to allow competition. So certainly, the segment is performing exceptionally well. However, massive intake of employees over the past few years have created a kind of surplus in some departments, leading to unwanted cost swelling. For example, the workforce at the Seattle headquarters grew to 40,000 from just around 5,000 in 2010. This is an eight-fold growth in seven years!
The jobs cuts are probably aimed at optimizing such costs and improving efficiency. A few months back, rumours were rife about a hiring freeze put in force by the company. They had also cut down the number of vacancies by almost half.
There are also speculations that the job cuts are implemented in the retail space to divert more investment into other areas with higher growth potential, such as AWS, Alexa and the digital entertainment realm.
Smart investments
There are also speculations that the job cuts are implemented in the retail space to divert more investment into other areas with higher growth potential, such as AWS, Alexa and the digital entertainment realm. CEO Jeff Bezos had been vocal about Alexa’s performance in the company’s latest earnings report, stating that he plans to “double down” on the product this year.
Complementing this theory was another report that came along with the layoff story – Amazon is working on custom AI chips for Alexa, to reduce the device’s response time and to increase efficiency. Amazon’s recent $90 million acquisition of Blink is also speculated to be a chapter in the AI-Alexa story.
So, no. With some amount of streamlining, we guess the sinners are probably gonna thrive!