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Why Did Amazon Just Lay Off Hundreds of Workers?

Topics: Current Events
Amazon campus Seattle
Courtesy of Amazon

Amazon is growing. Last year, the tech giant announced that it would hire 100,000 workers during 2017 and the first half of 2018. The company’s second headquarters alone will be home to around 50,000 employees. So why are they laying off hundreds of workers in Seattle and elsewhere, according to yesterday’s Seattle Times story?

Blame high head count in some business units.

“According to several employees, the rapid growth of the last two years left some units over budget and some teams with too much staff for their work,” writes Matt Day at The Seattle Times. “Amazon had implemented hiring freezes in recent months across several groups, a move that reduced the company’s open job listings in Seattle to their lowest level in years.”

In a statement to The Times, Amazon confirmed the cuts: “As part of our annual planning process, we are making head count adjustments across the company — small reductions in a couple of places and aggressive hiring in many others.”

The company said that it would work to find other jobs at Amazon for affected employees.

Are Robots Coming for Amazon Jobs?

Another possible reason for cuts: a move toward automating certain business roles.

At Bloomberg, Spencer Soper explains:

Amazon is automating tasks such as forecasting demand for new products and negotiating their prices, said Michael Lagoni, chief executive officer of Stackline, an e-commerce data analytics firm that helps brands and manufacturers sell on Amazon.

For instance, someone selling televisions would have to call an Amazon buyer, show them the product and negotiate terms for selling it on the platform. Now, those functions have been mostly automated, Lagoni said. Amazon is also making manufacturers and suppliers do more work — such as coordinating marketing and promotions — things that Amazon used to handle internally, he said.

The company has also automated some functions in its fulfillment centers, in addition to rolling out Amazon Go, a pilot for an automated grocery store.

But that doesn’t mean that workers should panic. This week’s layoffs represent a tiny fraction of its 560,000-person worldwide workforce, and the company is still hiring at a rapid rate.

Even automation in fulfillment centers hasn’t stemmed the hiring spree: Dave Clark, the executive in charge of operations at Amazon, told The New York Times last year that no workers were laid off as a result of automation at fulfillment centers.

“The people didn’t go anywhere,” he said at the time.

Bloomberg reports that Amazon is currently hiring for 12,000 corporate positions worldwide, including 3,900 roles in Seattle.

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Jen Hubley Luckwaldt
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