The massive job cuts at Amazon and Salesforce indicate a horrific economic downturn

The job cuts at Amazon and Salesforce indicate worsen and tougher economic downturn than anticipated earlier. The layoff at Amazon is a result of an aggressive hiring strategy during the last few years and economic uncertainty in months to come.

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The number of jobs cuts at Amazon has shaken the worldwide tech industry, indicating that situation could be even worse than anticipated earlier and people must be mentally prepared to deal with it. The e-commerce behemoth has revealed that it will cut over 18,000 positions from its workforce. This is the largest layoff in the history of which has been dominating the global ecommerce market for over a decade now.

If the news of the layoff in Amazon doesn’t sound quite concerning to you, perhaps another announcement made by SAAS major Salesforce would portray the worrisome scenario to you. Salesforce is also planning layoff more than 8,000 employees anticipating the longest ever recession.

Amazon has cited “the uncertain economy” and aggressive hiring during the last year as the reason behind the job cut.

The chief executive of the company, Andy Jassy, said in a memo addressed to its staff: “Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles.”

He added that Amazon successfully sailed through “difficult economies” in the past and will continue to endure them. “These changes will help us pursue our long-term opportunities with a stronger cost structure,” he added.

Jassy said that the layoffs would most likely affect the brick-and-mortar stores that include Amazon Fresh and Amazon Go as well as its PXT companies, which manage human resources as well as other tasks.

Although he didn’t specify which roles affected were, but Jassy stated in the statement that Amazon will communicate with affected workers “or where applicable in Europe, with employee representative bodies” starting on January 18.

The decision to reduce a sizeable headcounts are in a sharp contract to the company’s another strategic move. Quite recently the retailer recently announced to increase its base-pay to attract best talents available in the market.

The reductions in staffing amount to the equivalent of 6% of Amazon’s 300,000-person workforce. Amazon has over 1.5 million global workforce.

It all started in November last year when Jassy informed employees that job cuts were imminent because of the current economic situation and the rapid hiring process over the last several years. The announcement of Wednesday’s news included job cuts post-announcement made in November, alebit the the number wasn’t disclosed. The company, based in Seattle, has also offered buyouts on a voluntary basis and was cutting costs in other business arms of vast business.

On the other hand, Salesforce announced it was cutting off approximately 8,000 workers, or 10 percent of its workforce.

The layoff announcement was made on Wednesday and is the largest since its existence. The San Francisco company is founded by former Oracle executive Marc Benioff who pioneered the idea of leasing software to devices connected to the internet – an idea that is now called “cloud computing”.

The layoffs have come in the wake of a shake-up within Salesforce’s top management. Bret Taylor, the co-CEO of Salesforce was handpicked by Benioff, resigned recently. Bret Taylor was also the chairman of Twitter when it was undergoing the company’s infamous $44 billion sale to billionaire Elon Musk. Soon after, Slack co-founder Stewart Butterfield also departed from the company. Salesforce purchased Slack two years ago for $28 billion.

Salesforce employees who lose their jobs will get nearly five months’ pay as well as health insurance, career resources, and other benefits according to Amazon. Amazon stated that it would also be providing a separation payment and health insurance benefits for transitional employees as well as support with job placement.

Benioff, who is the current chief executive of Salesforce took all the responsibility of the current layoff. In a memo to employees he expressed his disaappitment for letting employees go despite continuing to recruit aggressively during the pandemic, which cause da huge spike in demand for salesforce as thousands of americans started working from home.

“As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that,” Benioff said in his.

Salesforce have had around 49,000 employees as of January 2020. That was a month before the pandemic hit. Salesforce’s workforce today is 50% greater than before the outbreak.

Benioff from Salesforce and Jassy from Amazon are not the only ones who have decided to let go thousands of employees recently. The CEO of Meta Platforms, Mark Zuckerberg also admitted that he wrongly interpretued the profits Facebook and Instagram were reaping during the epidemic. This led him to announce, in November, that the company was planning to cut 11,000 of its people, or 13% of its workforce.


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