'Is this a leadership problem?' asks investor as Amazon says it will lay off 18,000 workers

Record ID: 1705387

  • Title: 'Is this a leadership problem?' asks investor as Amazon says it will lay off 18,000 workers
  • Date: 5th January 2023
  • Summary: WILTON, CONNECTICUT, UNITED STATES (JANUARY 5, 2023) (REUTERS) (SOUNDBITE) (English) VESPULA CAPITAL MANAGEMENT AND TACTICAL INCOME, FOUNDER AND CEO, JEFF TOMASULO, SAYING: "And one of the reasons why companies start to lay off people is because they... it's the first thing that they can do to actually save money, and it's the quickest thing they can do to save money, especially when you think about 17,000 employees, and the type of employees that they might be cutting, or they're going to be executives that have big salaries, and that could affect the bottom line and save Amazon quite a bit of money. And then on the flip side, the reason why, like, when you think about a company, like Amazon or Goldman Sachs, to really to... for something that hit the bottom line quickly, there's really not much else out there but to cut jobs, right? Because if you're going to stop spending money, you know, or stop programs, or stop spending, it takes a little bit longer to see that come up in the earnings and the revenues."
  • Embargoed: 19th January 2023 21:49
  • Keywords: 000 jobs 18 Amazon Andy Jassy cuts employment human resources layoffs staff workforce reduction
  • Location: VARIOUS
  • City: VARIOUS
  • Country: US
  • Topics: Company News Markets,Economic Events,North America
  • Reuters ID: LVA003064905012023RP1
  • Aspect Ratio: 16:9
  • Story Text: Amazon.com Inc's layoffs will now include more than 18,000 roles as part of a workforce reduction it previously disclosed, Chief Executive Andy Jassy said in a public staff note on Wednesday (January 4). The layoff decisions, which Amazon will communicate starting Jan. 18, will largely impact the company's e-commerce and human resources organizations.
    The massive job cuts by Amazon, one of the biggest private employers in the United States, show the wave of layoffs sweeping through the tech sector could stretch into 2023 as companies rush to cut costs, analysts said on Thursday (January 5).
    As a demand boom during the pandemic rapidly turns into a bust, tech companies shed more than 150,000 workers in 2022, according to tracking site Layoffs.fyi, a number that is growing as growth in the world's biggest economies starts to slow.
    The layoffs brought back memories of the dot-com bubble at the start of the century and the 2008 financial crisis when tech companies cut jobs in thousands to reduce spending.
    During the global pandemic, companies ramped up hiring only to reverse course in 2022, with the tech sector leading the job cuts, which according to executive coaching firm Challenger, Gray & Christmas, Inc, surged 649% from 2021.
    The drop in demand amid a steep rise in borrowing costs has led several executives from the sector to admit they hired in excess during the COVID-19 crisis.
    Meta Platforms axed 11,000 jobs last year, with Chief Executive Mark Zuckerberg saying he had wrongly expected that the pandemic boom would keep on going.
    Tech giants Microsoft and Google-parent Alphabet have already hinted at cost cuts, including layoffs.
    Salesforce top boss Marc Benioff said on Wednesday the enterprise software company had hired "too many people" as he announced plans to cut 10% of the jobs.
    "Is this a leadership problem,' said Jeff Tomasulo, CEO and founder of Vespula Capital and Tactical Income, who has positions in Amazon, Meta, and Salesforce. "We are seeing some of these leaders do a really poor job at anticipating the downturn that we're going into."
    For Amazon, growth in its cloud unit that brings most of its profit has slowed as businesses cut back spending, while its online retail unit is reeling from strained consumer budgets due to rising prices.
    (Production: Aleksandra Michalska)
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