After eight years of aggressive hiring which saw the online retail and global giant Amazon grow its work force from 5,000 in 2010 to 40,000, the company announced plans to lay off hundreds of corporate workers in its Seattle headquarters and in other locations.
Over the last few years, Amazon also acquired other retail businesses such as Whole Foods Market as its growth forced many traditional retailers to close down operations.
According to news reports, Amazon’s massive hiring spree resulted in several departments going over budget as they were over-staffed. The company had begun to implement hiring freezes to slow down new employment by reducing the number of open positions to half of the 3,500 advertised last summer.
The layoffs will primarily affect Amazon’s headquarters in Seattle but employment cuts have already been implemented in the company’s other retail subsidiaries including Las Vegas-based online footwear retailer Zappos which reportedly laid off 30 workers.
The nationwide employment cuts could be part of Amazon’s efforts to streamline operating costs and to consolidate its retail businesses.
Massive layoffs are not unusual in the tech industry. Microsoft laid off thousands of employees last year although majority of the cuts were implemented in their operations outside the United States.
The cutbacks in employment do not appear to indicate that Amazon will drastically reduce hiring activity. Amazon currently employs more than 500,000 people worldwide. According to its latest quarterly earnings report, Amazon increased the number of its global workforce by 66% over the previous year.
A spokesman from Amazon released a statement that read:
“We are making head count adjustments across the company; small reductions in a couple of places and aggressive hiring in many others. For affected employees, we work to find roles in the areas where we are hiring.”