Amazon has ceased hiring after its hiring frenzy during the pandemic as the technology giant seeks to reduce costs amid decreasing demand and mounting costs throughout its business.
The latest financial report states that the company added 21,000 employees during the third quarter. While in comparison, Amazon added 133,000 employees in the same time in 2021 and 248,500 in 2020.
The total direct workforce working for Amazon is 1.54 million people, an increase of 5% from last year.
The Seattle tech giant’s shares dropped by nearly 20% on Thursday after announcing a lower-than-anticipated holiday quarter forecast.
Amazon CFO Brian Olsavsky, on a call with reporters, said that the company is gearing up for “what could be a slower growth time” because of growing foreign exchange headwinds, global inflation, elevated gasoline prices, and growing energy expenses.
Olsavsky also claimed that Amazon is “tightening our belt” by freezing employment in some businesses and canceling products and services in some to counteract dropping sales. He added, “we’re going to be very selective in our recruiting.”
Olsavsky remarked, “we have experienced inflation in our wages this year, ” particularly for technical workers.
According to reports, Amazon is freezing hiring for corporate positions within its retail division.
After overstaffing its warehouses to manage the demands caused by the pandemic, Amazon’s direct workforce decreased by 99,000 people from the first to the second quarter, the highest sequential drop in its history. The main cause of the fall was attrition in Amazon’s fulfillment and distribution network.
Sequential job drops over the last three quarters clearly show the changeover in Amazon’s warehouses. Usually, the company would fill vacancies with new employees, concealing the exits.
Other software heavyweights that also had high employee growth during the pandemic, like Microsoft, indicated this week that its headcount growth during the current quarter will be “humble.”
Workers of Amazon’s third-party vendors, partners, and contractors are not considered among the company’s direct employees. They include package delivery drivers who are employed by independent businesses but use vans with the Amazon logo.