[eMarketer] Amazon’s cost-cutting measures continue

Amazon plans to lay off over 18,000 employees—nearly double the number the company initially said it would cut—as it wrestles with bloated operating expenses and softening consumer demand, per The Wall Street Journal.

The majority of the cuts will be directed at the company’s retail and recruiting divisions, CEO Andy Jassy said in a letter to employees.

The announcement comes shortly after Amazon revealed it had obtained an $8 billion unsecured loan to help shore up its business amid global macroeconomic headwinds, per an SEC filing.

The expanded cuts are Amazon’s latest attempt to get costs under control after embarking on an overly optimistic course of rapid expansion during the first two years of the pandemic.

Amazon says that despite the headwinds buffeting the company, Amazon is more optimistic than most about the broader economic landscape.

According to eMarketer, an internal analysis reported on by Insider, the retailer’s economists believe there’s just a 30% chance of the US entering a recession within the next six months.

But given that Amazon’s current situation is partly a function of its inability to predict that ecommerce demand would slow once COVID-19 restrictions were lifted, it makes sense that the company is preparing itself for the worst.

Read the full eMarketer article here

www.emarketer.com