Amazon is said to plan to lay off thousands of employees
nytimes.comMass layoffs makes the news because papers depend on sensational headlines, but it's important to put into perspective.
> The pandemic produced Amazon’s most profitable era on record ... Amazon doubled its work force in two years, and funneled its winnings into expansion and experimentation to find the next big things.
So it doubled its head count in the past 3 years and is now trimming by 3% (or 1% of global).
Update: Tried to figure out whether the doubling head count was corporate employees or total. I don't have time to dig into it now but a quick search did turn up Amazon's EEO reports in which they break employees down into a number of categories including "Professionals" -- which sounds like it would include engineers. 77K in 2019, 121K in 2021. So it's reasonable to assume those did double from 2019 to the present. See https://www.aboutamazon.com/news/workplace/our-workforce-dat...
I am assuming the "doubling" might have come from delivery drivers and workers at warehouses mostly. Looks like the good folks who are let go are now mostly from non-engineering.
I clearly remember growing up in the 1980's and later and hearing about mass redundancies happening during a bad economy.
It was newsworthy because of the potential devastation these events would have had on an area; as in some people may never be employed _ever again_.
It's why Ireland gave so many tax breaks to Apple; they employed thousands from one city. Layoffs would have made an already bad situation far worse.
Is that "doubled its work force" for the corporate roles or entire amazon?
see edit to my post above
Right. But hiring freezes are also happening and they are even more impactful.
This is just the latest round of cuts at Amazon: "From April through September, it reduced head count by almost 80,000 people, primarily shrinking its hourly staff through high attrition."
Also: "Amazon froze hiring in several smaller teams in September. In October, it stopped filling more than 10,000 open roles in its core retail business. Two weeks ago, it froze corporate hiring across the company, including its cloud computing division, for the next few months."
There's a big difference between reducing the number of hourly workers (warehouse, drivers) and cutting 10,000 corporate jobs.
Amazon has something like 100k corporate employees, and their URA targets force managers to PIP approximately 6% of the corporate employees every year, so going from 6% to 10% isn’t exactly a massive change.
Employees who are PIP'd are replaced, though. The positions themselves still exist. This is cutting 10k positions if I'm interpreting correctly, so it's really going from 0% to 4%. It may also impact entire teams or business lines.
This isn't going from 6 to 10% though, this is a one-time reduction of 10% on top of the normal 6%.
Somewhat OT, but I never understood why so many corporations have this hard and fast rule that they have to fire (or give no bonus to) a set percentage every year: "We must fire X% of people."
I have worked at a few firms that have done this, and I have heard from a few people their managers arbitrarily picked them to get knocked into a lower tier.
Conversely, if they hired a big cohort of bozos one year, you know they would never say, "We would like to get rid of 15%, but our plan is only to get rid of 10%." They would have no problem going beyond 10%.
This is a reduction of 10% on top of the expected regular attrition (6%).
> so going from 6% to 10% isn’t exactly a massive change.
It is if made overnight!
Agreed. I'm just illustrating that it's part of an ongoing pattern at Amazon. Not some new, shocking thing. I'd expect more in the future.
True. The hourly workers are more likely to be living paycheque-to-paycheque, and their lives will be more impacted than a tech worker with 12 months of runway and job prospects everywhere.
Why?
...what is it? I really can't see a difference.
Hourly workers (unskilled labor) are flexible and cutting hours is almost as easy to reverse as it is to do in the first place. Cutting salaried employees (skilled labor) is a much harder and expensive decision to reverse. So doing so means that there is either a consistent issue that is not getting resolved, thus making them not worth the expense, or things are about to get so bad that the company feels that the savings are worth the loss of skilled labor.
And clarify the difference between skilled and unskilled labor (which might make this make more sense), this is not a description of the work itself, but rather the barrier of entry. Anyone can be taken off the street and trained into an "unskilled" position with relative ease. That is not true for "skilled" positions though. Which is why Amazon's decision to start cutting corporate jobs represents a fundamental shift in their path going forward.
Hourly employees are easier to replace because the training path is much shorter.
Attrition rates at Amazon are really something else
They do have 1.5 million employees (per Google)
Which can be confusing because there are two amazons - the Walmart competitor and the cloud company.
Same with Apple, to be fair. Apple retail may employ more than Apple corporate.
> In 2018, Echo and Alexa lost about $5 billion, said a person with knowledge of the finances. When Amazon introduced new devices this fall in an annual event, it was notably more restrained than past years when it had featured zany products like a sticky note printer and $1,000 home robot.
$5B loss from one business line is a lot. Maybe this manner of investment inspired Zuck on the metaverse.
I never got the value of voice devices.
In my experience you learn how to make them do 1-2 things. You learn a few patterns. But beyond that, even if they work 95% of the time, that 1 in 20 is annoying enough to make me not want to use it and just push a few buttons.
Maybe case in point is using voice in the car. It should be the best, most obvious application. Yet aside from maybe texting, people want things like Apple CarPlay - a big touchscreen - not voice commands.
Kitchen use cases for voice for me:
Setting multiple named alarms while cooking and often my hands are not clean to handle a phone or they're holding something going in an oven or they're stirring something.
Adding things to Todo lists or shopping lists as I notice them.
Setting alarms when I set a cup of tea to brew so I don't forget about it. I have to walk back to the room to stop it ringing, which means I can add milk and pick up my tea.
Changing what I'm listening to while washing dishes.
I'm already distractible enough, not having to pick up my phone to do them also means I'm less likely to get distracted.
> people want things like Apple CarPlay - a big touchscreen - not voice commands
I don't know the answer, but i wonder why you say that's what people want, since the high end BMW and Audi and Mercedes cars etc now all have their own voice commands to _avoid_ using the touchscreen (presumably for driving).
I wonder how they even get a survey that's representative.
Because customers are demanding CarPlay
https://www.cnbc.com/2021/05/29/apple-carplay-massive-succes...
thanks (seriously cool article)
Voice devices are actually very handy for those with mobility impairments. That being said, I have yet to meet anybody who actually uses these voice assistants daily (other than the aforementioned people with mobility issues).
My family uses ours daily and they're fully integrated into our routines. They're our alarm clocks that wake us, and are how we check the weather to decide how to get dressed in the morning. I ask them to turn on the lights in the morning, and to turn them off at night. Alexa locks my front door and closes my garage before bed. In the kitchen, every time we cook, we ask Alexa to preheat the oven or air fryer, and ask her to set the timers for whatever we're cooking.
It's not good practice to connect your security systems to your voice assistant, especially door locks. Maybe this isn't the case in your home, but in smaller apartments it's certainly possible for a malicious actor to say "Hey {voice_assistant}, unlock front door", and they gain access. It's the modern day "open sesame".
They thought of that many years ago, before adding lock support to Alexa. You can lock the door with a simple command, but unlocking or opening requires a pin code. Nobody can get into my house by shouting through the windows.
Oh wow, did not know that! Clearly I am only a recipient of this advice, and not a practitioner. I stand corrected.
Can you say your PIN? And if so, can a recording of you or a simulation of you saying it be played?
> it's certainly possible for a malicious actor to say "Hey {voice_assistant}, unlock front door", and they gain access. It's the modern day "open sesame".
I use Google Home and it has a voice match feature which will only accept on commands for allowed voices. Some people might not like this for the privacy aspect though.
Unless they've improved it over the last couple of years, Google's voice match is pretty easy to fool: When I played a recording of my friend's voice saying "hey Google" and then completed the sentence myself, the Home Mini thought I was him and let me access his calendar even though we have completely different voices.
Of course this is all academic. Anyone can get into a home via the windows. It's just that half of all Americans live in a home that has a gun, so getting out alive might not be as easy as getting in.
We use ours daily. Primarily it's a kitchen timer and a way to add items to our grocery shopping list. We used to use it for music but now tend to stream to a tabletop system with better sound. If it dies or becomes unsupported, it won't be a major loss but it does add a bit of convenience to our lives.
Definitely use ours on a daily basis. Pause TV, play music, set timers, broadcast to other devices, set the thermostat, call people, and doorbell notifications. Nothing earth shattering or life changing but more useful than not.
We might be a outlier but our family of four uses it at least 50 times a day if I look at our voice history.
Alarms, timers for the kids, playing music all day, asking for knowledge questions, etc. For example yesterday my kids asked "which is after a tortoise or a snail". The kids use it a lot because they don't have phones to google stuff but they always have Alexa to ask.
I used to feel that way and I only had Siri devices since I had privacy concerns. Somehow I ended up with a free echo dot and it was significantly better. I got some smart lights since my kids could not remember to turn the lights off and now I have that on a privacy network associated with alexa and I've been impressed with the voice recognition. If you have a huge house being able to say 'alexa turn off the upstairs lights' or 'turn on the garage light' when you have a trash bag in your arms is pretty great.
> and just push a few buttons.
There are just so many buttons to push, it's not only about lights. Remember, they have 'routines' that can easily equate to dozens of button pushes. Even without routines, I can tell it to set all lights in a room at some percentage. And no, I can't just wire a dimmer, because they are spread across light fixtures. Sometimes your hands are busy and it's good to be able to control stuff.
If anything, they should make it easier to add commands (I want to be able to change 3D printer settings without have to fiddle with the interface – it's connected to Homeassistant so it has access to controls).
It's not just for that either. Alarms, timers, unit conversions, translations, calls from echo to echo in different rooms, weather at some location, purchases (and asking where are they)... you can even ask if some food can be given to your dog.
I will agree that it's infuriating when they don't work. And it doesn't seem to difficult to fix. There are commands I use frequently, chances are I am using them again. Asking to turn of the lights and having it play some random song is ridiculous.
To me the key question is the value of voice devices. There may be good use cases for voice assistants – but many of those interactions can take place via your phone, which is always close by.
What do dedicated hardware devices like Alexa add above and beyond that? They have a nicer speaker for playing music, but there's a whole ecosystem of bluetooth speakers you can use your phone with. They can control smart lightbulbs which I think phones don't have the right antenna for... but it feels like that could be solved by a $20 Chromecast-like dongle that your phone talks to over wifi. Is there anything else left to justify separate hardware, especially hardware that's likely sold break-even or at a loss?
CarPlay and Siri is a pretty compelling pairing though. Looking/touching is dangerous while driving, so that is minimised by also being able to talk to the robot.
It would be nice were that actually the case. However, in practice, I tend to find that doing most things just using voice with my hands on the wheel and eyes on the road ends up being a really frustrating experience. This isn't a particular knock on Siri specifically. I'm pretty sure I'd find Google or Alexa similarly annoying in the same context. As someone says up-thread, Alexa at home is fine for a few formulaic things that I know the incantation for and pretty useless for everything else.
I'm not a big user of Siri, but I've had better luck than you describe. Siri will reliably play songs and podcasts I request; read out text messages; transcribe my response to text messages; and find directions to places. This is about as much as I really want.
I find podcasts and playlists pretty frustrating generally. But then I tend to want to listen to something fairly specific as opposed to more or less whatever as background; I've never been a big radio listener. I have used it for texts but that's very uncommon and directions can be hit and miss to make changes on the fly. It's definitely better than nothing but it's a far cru from a passenger doing that sort of thing for you.
I have the same use case but with very different results. “hotwords play my playlist foo” works for many values of foo with both google assistant and Siri. Ditto mapping, ditto sending texts.
Do you have an uncommon accent?
Combine this with the privacy concerns and that's why I've never brought one personally. I know a lot of people who have them but rarely ever use them.
The only good use case I've seen is if you're having a conversation / debate with someone you can use them as a real-time fact checker.
I really only use my echo for a few things, but those things I do nearly daily and it provides enough value that I'd replace it if it broke. I don't need it to be an "everything device".
I don't get the value either, but i sure do miss it when I'm away.
I worked for Alexa before. If I remember correctly there are only 4 use cases of it like weather, smart devices, music and timers/alarms. There used to be 10k employees at that time of which 3k were working in music alone. There was definitely a bloat at that time.
The third party ecosystem never caught up and there is no killer app for Alexa other than those 4 use cases. The API (slots/intents) is limited and hard to create any useful interaction with it. My gut feeling is many divisions will be affected in Alexa.
That describes me to a T. It's a convenient alarm in my bedroom and sometimes timer in the kitchen. Good for a cursory weather report if I don't need all the details. Sometimes play some music before going to sleep. Use it to turn my bedroom light on and off. That's about it.
I just don't see the path to profitability for Alexa. Like, sure, it's neat, but how does it make any money?
Do they sell the devices at a profit?
Does usage of the devices lead to increased sales on Amazon.com? Are those sales that wouldn't have taken place on the app/website otherwise?
It's an ads vector
Eventually people will say "Alexa buy my groceries"
Alexa will buy from the highest bidder
This has been promised for a long time, but from my perspective, I don't really see this getting any closer to reality.
But for what it's worth, I think there's a conflict of interest here. No one is going to believe that Amazon won't prioritize Fresh or Whole Foods for these orders - even if they don't.
I use Ocado for my groceries. By default they will deliver based on a combination of things I've marked as "every X unit of time" and a predicted/suggested set based on past purchases. Then I can log in before a deadline to amend it. 90% of the basket typically remains unchanged, and quite regularly I can't be bothered to even log in to check what it's selected for me because I know it'll be close enough unless there's something specific I absolutely need this week.
No reason why Amazon can't do something similar. They only need it to be "good enough" that people start getting used to not always needing to ask for it to list what is in the upcoming order.
How is this any different from a physical grocery store deciding on what to position on the ends of the rows due to incentive? People love to act like these problems brought on by the internet are new but all to often it's just an evolution.
At least my grocery still is reasonably organized and well laid out. If I need ketchup, I know exactly where to go to find all of my options side by side.
If I tell Alexa to order ketchup, who knows what brand I'll get or what size? It's possible I might end up with banana ketchup or even mayonnaise given how poorly Amazon's search functions work.
The only kind of people I imagine would be okay with a 3rd party blind shopping for them would be those who haven't seen the inside of a store in years because they have help that does all of their shopping and domestic work already.
it may also have to do with price insensitive customers.... if you doordash every meal, even groceries from the highest bidder remain cheap in comparison.
It's one banana, Alexa. What could it cost? $10?
We’ll need Reg NMS for groceries.
> Does usage of the devices lead to increased sales on Amazon.com? Are those sales that wouldn't have taken place on the app/website otherwise?
That seems reasonable. Customers can order directly through the device ("Alexa, order some toilet paper"), that's low friction and lets Amazon rank options to their benefit. Plus regularly using Alexa keeps Amazon primed (no pun intended) in the customer's mind so next time they go online shopping they default to Amazon. Once you're using Alexa, there's an Apple effect encouraging adoption of other Amazon products through ease of use (Amazon Music, FireTV, Audible, etc). Amazon is also monetizing their products with ads, I'm sure that's part of the Alexa strategy as well.
Remains to be seen whether there is a "pull back" from smart devices that impacts the play. I was an early adopter of Alexa... at this point no one in my technical circle has proprietary "smart" home automation devices anymore, and the non-tech folks at best use Alexa to search in the Amazon app (mainly because they struggle with phone keyboards)
> at this point no one in my technical circle has proprietary "smart" home automation devices anymore
What are they using now, if you don't mind me asking?
Home Assistant almost goes without saying at this point.
Does it? I walk in tech circles, and actively work for a startup, and I don't think a single person in my circle of friends/coworkers has a Home Assistant setup, and _most_ have either an Alexa or a Google Assistant of some form.
Sure, but you didn't tell me that "no one in my technical circle has proprietary "smart" home automation devices". ;)
Home Assistant for home automation, Mycroft for voice control.
As others said - nothing (my preference), Mycroft, or Apple's Home Assistant (yes, propietary)
Thanks. I do however think that people are referring to home-assistant.io, not Apple Home Assistant.
Probably nothing.
But is any of that profitable enough to justify having literally thousands of developers, probably costing a quarter million each on average? That kind of overhead isn't sustainable.
> lets Amazon rank options to their benefit
This might get them in trouble eventually.
> Does usage of the devices lead to increased sales on Amazon.com?
Yes. We have a few Alexa's and it's helpful to reorder commodities with your voice as you run out of that item (batteries, tape, printer paper, etc). I just add them to my cart and check the price later, but I like it because I'll likely forget to reorder some of those things if I don't do it right away.
Apple and Samsung own our pockets with their devices (and associated platforms), Amazon wants to own the spaces where our phone isn't always close by or easy to use (mostly home and car).
Doubtful they sell at a profit. But do they allow developers for their apps (or whatever they're called, skills I think) to charge money and then take a cut just like any other app store?
I'd imagine like any other new product, they're taking a risk and hoping the product takes off with higher adoption so they can earn more. The bet on Alexa always seemed to be that people wanted a hands-off, voice powered way to interact with the internet, and perhaps they could charge for skills (creating their own 'app store') at some point, or earn more on selling products on Amazon because people would enjoy the convenience of just asking their device to buy more detergent or whatever. Not sure I ever really got the premise here, because it was always quite easy to order stuff on my computer or phone.
Anyway, I don't work at Amazon so I'm not sure if I'm mistaken about what the idea was. I imagine only some people close to that division would really know.
When Amazon Music Unlimited was an attempted thing, that was a direct path to monetization that basically only happens if you have Alexa/Echo widely deployed. Otherwise, it seems a tenuous link to increasing sales in retail.
(I say "was" because they recently rolled part of it out as a Prime benefit a couple of weeks ago, but I can't figure out the exact difference between unlimited and what's included in Prime [and don't care enough to chase it down], but they are still offering a $9/mo unlimited offering, so there must be some difference.)
The difference is that on Prime it's radio-style only. If you ask for a specific song you get a playlist of songs like the one you requested which may or may not include the song you asked for.
A massive limitation for some people, but it fits my usage.
It was perfect timing for me. Google just massively raised their prices for Youtube family so I was looking for alternatives.
The one that is included in prime is basically like spotify free without the ads.
You can only play in shuffle mode.
>but how does it make any money?
"Alexa, put that on my shopping list" directs spending to Amazon in lieu of whatever the local alternative would have been.
There was some belief, I think, that there was an app space for voice apps, similar to mobile. I don't think that's necessarily true, and despite Alexa focusing on making it relatively easy for developers to create their own VUI apps, there hasn't been (as far as I know), any real killer app developed in this space.
Apps on voice are so handicapped - it's really difficult to handle any one-time setup. I wanted to see if I could make a voice app that looked for emails on my third-party mail server but it's just not practical with the stateless function requirement.
The Echo devices are way way too dumb. The user's Cloud account needs app-accessible storage.
The most obvious path to me would be other businesses paying to integrate with Alexa. This would have required a level of platform buy in from consumers that never really materialized though, I think.
Alexa doesn't need to make money. It just needs to be another way to make it easier for people to buy from Amazon than from other websites.
They are localizers.
Their actual purpose(s) will be emergent and are still being discovered.
Having a microphone/speaker in people's houses seems like a great way to collect a ton of data & guide their behavior.
No security researcher has ever found proof that they are "always on" and recording everything people say. If they were, it would be front-page news and Amazon would have government investigations.
The devices listen for their wake word before ever transmitting data to the cloud. (This is also because the sheer amount of bandwidth needed for always-on would be un-economical even for Amazon).
This is not strictly true. I examined a master's degree thesis last semester where the student proved conclusively that Alexa devices are periodically spamming bursts of data back to Amazon HQ even when not woken. Beyond a heartbeat, too - MBs of data, not KBs.
No clear idea what that data is, though. There's at least a small chance it isn't benign.
So, mitmproxy that traffic and see what it is?
Scope of his work didn't go that far, he looked at several devices and Alexa was notably chatty. He was measuring for abnormal data bursts from IoT home devices - included things like smart bulbs etc.
isn't the point of SSL that you can't do that (assuming the client is verifying certs, etc)?
link?
Unpublished. It's still going through board approval.
As/when it's put on my institution's open repository I'll post a link. Might be a few weeks though.
Interested to hear more, once it's through! :)
Be sure to put as a submit :)
Amazon is surely aware of the aftermath of Google's accidental Wireless network war-driving.
While absence is hard to prove, an intentional or unintentional data collection beyond what is stated in their policies is highly unlikely.
I also don't think any insiders at any of these companies have leaked that they passively listen to what people say.
Do sample recordings, reduce bitrate (you can have good voice recording and playback at less than 3kb/sec) and upload only if the device detects something worthy of notification.
Hell, don't even send the sound, just send a weekly report of events.
What behavior do they hope to collect that is not a huge privacy liability with the effort? They already know where millions of people spend their money (not say they will buy, but actually follow through).
Smartphones and laptops are already that.
Is it collecting that data when not spoken to?
No.
How is that much loss possible? Not a hardware engineer, but from the exterior it feels like there is nothing exotic about the design which would warrant extravagant development costs.
Have they been funneling billions of RD into the software side, or are the units comically underpriced and have a BoM in the hundreds?
My wager is that the devices are sold as a loss leader.
Then on top the software development is fairly novel - so they're probably spending quite a bit on development efforts related to the devices.
They're eating the costs for running the backend processing for all of these devices (they're sold as a one time fee, despite requiring services provided by Amazon servers).
Finally - they were promoting the ever loving shit out of the development tooling to app developers for a long time with a lot of seminars, development guides, free services on aws, etc.
---
My strong guess is they wanted them work out the same way Kindles have - loss leaders that more than make up for it by securing digital goods purchases. But personally - I spend lots of money on amazon for books for my Kindle, and I spend basically nothing related to Alexa (there's literally just nothing I want to buy through it).
Lately my Alexa has started inserting promotional content into the standard voice responses (bs like "Alexa what time is it" returns the time, and then a "and it's a good time to watch the new Rings of Power tv show? should I tell you about it?").
They're going to go into the trash shortly at this rate. I'll switch to a self hosted replacement like mycroft or something.
My intuition is that it's a) very high R&D costs coupled with b) being partly a hardware play, where unlike software, marginal cost of distribution does not tend to zero and where it's therefore much easier to lose money per unit sold.
They’re probably selling every unit at a loss. A big part of the Amazon smart home stuff also has to be the data it collects and the way it integrates with ordering off the retail site which might not have been counted here.
In addition to the other replies, I'll add that they have a new frontier for Alexa in the works and while I don't think the hardware has to be all that exotic, the development effort will be. I know they're at least a year into development on that, and those costs will be high with nothing public to show for it (yet).
They likely sell them at a loss.
Long-term, the hope is probably that the halo effect - "oh, I have Alexa, so I'll buy a Ring security system" and "Alexa, buy cat litter" sort of stuff - balances it out nicely.
Definitely. They have bundles with their Blink security cameras, which can be viewed on the Alex Show models.
$5B is around 1% of their (current) trailing 4 quarter revenue, which I would say is "not outrageous" if voice/home assistants is an area of growth and investment for Amazon.
Why would a 2022 article be citing a 2018 loss figure for a almost surely (if my house is any indication) fast-growing segment?
Amazon's hallmark in the past has been investing big into businesses without immediate profits. Amazon gets massive revenue but has nowhere near the margins of an Apple, or Google. As you know, a net loss and revenue are not apples to apples. For full year 2018, Amazon had net income of $10B on $232B of revenue.
All of which is to say that a $5B loss is a very material number. They obviously thought it would be a big profit driver in the future, which it has not turned out to be yet.
Amazon doesn’t release info about the Alexa category in their earnings, so any reporting can only rely on whatever figure has been leaked.
That seems like reporting on Meta's 2022 losses in virtual reality in late 2026, which would seem absurd, even if that's the best/only information they have at that time. (At some point, you have to admit "we don't have any relevant information" rather than report on "the least irrelevant information we can find".)
The story does note how old the figure is, so readers can take it with a grain of salt as appropriate.
You could think of reporting on selective leaks like this as kind of a needling for Amazon to release more up-to-date info.
Something I've never understood about layoffs is that large corporations have nearly unlimited borrowing power. Amazon's market cap is just over $1 trillion, so it could probably borrow up to ~10x or $10 trillion against that (almost half the US GDP).
Isn't that enough money to keep employees through a downturn?
The flip side is that individuals have almost no borrowing power. The bottom 40% of the US population has a negative net worth, so can't borrow anything:
https://news.harvard.edu/gazette/story/2016/02/the-costs-of-...
To me, this looks like evidence that profit comes from offloading externalities onto the public.
Ordinarily, workers could find work at other companies. But because companies are so large now, they have effective monopolies in markets like shipping. So layoffs could be used as a signal to bring companies up on antitrust charges.
Why would they keep employees through a downturn? They're profit-driven entities.
Of course they're going to dump externalities onto the public any chance they get, and we should strive to limit their capacity to do so... But in this case I'm not sure what you mean exactly? Nor do I understand what you mean about bringing antitrust because of layoffs? That sounds much more difficult to justify than most of the other reasons you might bring antitrust against these companies.
There are alternative ways to deal with a downturn, in the past German companies have successfully introduced part-time employment for all employees to avoid having to layoff employees. This avoids employee knowledge and experience from leaving, making it easier to scale back up once economy picks up again.
https://www.researchgate.net/publication/277267537_Securing_...
>This avoids employee knowledge and experience from leaving,
Amazon is very specifically optimizing their company to get rid of the need for both of those things!
Not everything people don't like is an externality. It has a specific meaning. Fired workers are not an externality.
But the unemployment that those workers receive is an externality. Now, the nature of UI does mean that it should wash out in the end, but in the near term laying off thousands of people simultaneously potentially puts a strain on the system.
No, unemployment costs is not a externality from the company. It is a public cost resulting from the layoff.
Externality has a specific meaning. It is a cost of production passed on to the customer or third party.
Not everything that has a consequence is an externality.
By your own logic, the government is a third party. Because the government aka the tax payer covers that public cost...
Let's say I'm a good neighbor and I take your trash to the curb. I decide to stop, you now have to take out your own trash or pay someone. That change brings a real cost to you, but it is not my externality.
If I put my trash in your bin, that would be an externality.
Not employing someone is neutral.
Laid off workers and the state are not harmed by the company that stops sending paychecks.
To think otherwise leads to absurd conclusions.
> Why would they keep employees through a downturn? They're profit-driven entities.
Because keeping people paid for a year during a downturn is cheaper than firing them and then rehiring and retraining someone else a year later?
Under what reasoning is it cheaper to keep them?
Under the reasoning that hiring is expensive and training is extremely expensive?
1. The salary of a current employee will always be lower than the salary of a new hire, even a year later,
2. The hiring process itself costs tens of thousands of dollars,
3. A new joiner is useless for 2 months, needs to be babysat for 4 more and will ask constant questions for 6 more (if not 18). This costs the company a lot in terms of support that has to be provided from more senior (in tenure) employees.
This comment is unnecessarily cynical.
The unemployment benefits system is indeed designed to buffer against unemployment which is why both employees and employers pay into it.
What's unnecessarily cynical? They have a duty to shareholders.
I like how the word greed not got replaced with duty.
This is like how in medieval times it was your duty to serve the lord and make him rich.
Lol it cannot borrow 10 trillion $$. Where are these make believe numbers coming from? And it can carry the employees at somewhere between moderate to severe risk of bankruptcy (in the case of amazon, it is lower than moderate).
If you have a crystal ball and know when the economy will reverse, no one will fire anyone. Otherwise you have to cut costs and human labor are the biggest costs in most companies. Sure, we could get into a culture where we ask people to take pay cuts for a brief period in return for stability but that seems to not work for some reason so people get laid off.
They absolutely certainly can not borrow 10 trillion USD. They do have massive revolving lines of credit (think billions, not even 10s of billions, much less trillions) but those come with conditions; it's not like a credit card at that level where you can just use it your whims. I don't even think the Federal government could borrow that amount overnight.
Corporations don't always see attrition as a bad thing, especially amazon. When execs buy to much it's nice to be able to make some returns, especially if it's the stuff you don't really like.
Why go into debt if it's not going to benefit the company in the long term? We don't actually know how long economic downturns can be, or what kind of turmoil will be encountered. Why keep a liability.
Then you have the attitude of management itself. There has been talk for some time that companies have been going crazy with hiring, and that's certainly the case. However, many mangers and execs have gotten in the mindset that their being horribly abused, and their employees have gotten lazy and entitled.
Have you talked to a manager, or CTO in the last few years (off the record, and not as an employee/coworker). They absolutely despise the average working stiff and are relishing the opportunity to exercise their powers again.
Why does a corporation do what is in its financial interests?
That is what they are designed to do. That's why people pay to be part-owners.
If my business is valued at a million dollars and I take out a loan for a million, my business is now valued at 0. That’s basic accounting. Amazon had a net income of 14B last year - no one will let them borrow anything close to their market cap, much less 10X it.
Edit: This assumes I spend my loan on payroll which is what the OP originally suggested.
Your original million doesnt go anywhere. If you start with a million and borrow a million, you now have 2 million in assets and 1 million in liabilities. Your valuation is not zero.
Now, If you pay one million to workers, you are now at zero
> If my business is valued at a million dollars and I take out a loan for a million, my business is now valued at 0.
No, my business would have the existing assets of $1m, new assets of $1m in cash a liability of $1m, leaving a value of $1m
(minus any interest payments)
No, your edit still ignores something else: at the time you took out the loan, you already had a liability for those employee salaries of $1M, so the $1M valuation means that you had at least $2M in assets.
Acquiring the loan moves you up to $3M in assets (original assets, plus $1m cash from the loan) and $2M in liabilities (employee salaries + $1M loan)
When you pay those employee salaries, you wipe out the salary liability and the $1M cash asset from the loan. This leaves you the original $2M in assets, and the $1M loan, for a net valuation of...$1M.
Basically, the loan ends up replacing the salaries as a liability on your balance sheet.
I think you might be misunderstanding how liabilities and assets work. If your business is valued at 1 million already, it means your assets and liabilities net out to $1M. Taking out an additional loan for $1M just gives you $1M in assets AND $1M in liabilities (assuming this is before interest kicks in)... so your business valuation is actually neutral.
Now, if you squander the $1M and don't generate more than $1M+interest, your business will lose value... but you would have to lose $2M to then increase your liabilities to wipe out your original valuation
They don't want to keep the employees and they want the remaining employees to be scared.
Iirc, the Soviet Union used to guarantee a job. Not sure how well that worked out for them, though. Don't they have a massive alcoholism problem still?
And Hitler was Vegan, didn't work out for him either.
Is meth vegan?
My pet theory is this boils down to investor confidence. Executives get more comp in stock, cutting workers sends the right signal.
I second that. These big corps are willing to pay contractor rates for thousands of workers and use phycological manipulation to balance it all out with FTEs. Contractor rate is often double+ FTE pay for the people they work alongside. All of this so they can report lower "employee" headcount.
This exactly. Investors need regular signals that the exec team is on their side. These layoffs (especially in troubled economic conditions) are just the kind of rituals that do that.
This is so completely normal in these industries that it is a non-headline.
Companies that have so much cash they can employ 100K+ developers on top of goodness knows how many designers, PMs, POs etc. of course they hire and fire. They can afford to offer above-average conditions when the markets need it and everyone goes flocking there only to be surprised when their job is taken away at the next point the shareholders are bothered about ROI.
If you want to ride the unicorns and take the risk, that's fine, but there are plenty of people around the world who have far fewer choices with their work and are paid far less so I don't feel too bad that someone's Christmas might be not as expected.
If you want job security, get a job somewhere that isn't trying to earn their next billion, where you can make a difference, where you are appreciated and where work/life balance means something. I expect you would feel much better :-)
> that someone's Christmas might be not as expected.
You should have sympathy for PEOPLE. Every one of the PEOPLE effected by any lay off or industry change is a person. It could be your relative, it could be you, ti could be me. Let's get out of the "I don't feel too bad for that person that's not me" and try to have compassion for fellow humans.
edit: spelling typo
His post did seem to have sympathy, directed more at those that have a lot less than a 200k tc.
it really doesnt matter how much you make as long as you have a family and do not own property or have inherited wealth you are a wagie and 200k or 50k ud have loans that you cant pay when you are unemployed...
> If you want job security, get a job somewhere that isn't trying to earn their next billion, where you can make a difference, where you are appreciated and where work/life balance means something. I expect you would feel much better :-)
... What?!?!? Where is this magical place you're talking about. Small companies can be better, but they can also be much worse, and you may have less recourse. You can really hide under a rock at a big corporation for like... decades.
Many of the "meaningful" jobs are low paying, and can be even more soul crushing. Teachers aren't always treated great. It's far more of a "hated by all" profession than you realize. Social work seems to be a tough racket on many fronts. You could have to do some difficult things and are almost guaranteed to see levels of despair and injustice that are difficult to bear.
All that for pathetic pay, but at least you have good job security, maybe sometimes with an asterisk; so best case you're one of the lucky ones guaranteed to be poor forever. I've heard that non-profits can be incredibly toxic as well.
In fact it almost seems that the "meaningful" professions are even worse, usually. There's a lot of corporate environments that are quite pleasant, have good pay and decent security.
"Heart" work almost always seems like a bad bet for financial security, and work environment. Doesn't seem worth it unless you're a very specific kind of person with talent that HAS to be a part of something, so is willing to put up with almost anything; boss puts cigarettes out on your forehead to pass the time? Sounds great, I'm just excited to be making music!
You will ALWAYS have 10 people tirelessly fighting for the job.
This comment is just silly.
So you think a job at a startup is more secure? You think a job at a smaller company is more secure?
BigTech layoffs might make news because they're Big but plenty of smaller companies will be laying off as the economy contracts, too. Also 99% of Amazon employees will be fine and the ones that are fired, at least on the corporate side, will find new jobs quickly because the rest of the industry is clamoring to hire ex-FAANG. Hard to see how working there is some huge risk.
Which American company employs 100k+ DEVRLOPERS?
I'm sure in its peak IBM employed way more than that including their India and China teams.
EDIT: found a source, 130K in india in 2017... == 33% of workforce
"Today, the company employs 130,000 people in India — about one-third of its total work force, and more than in any other country. Their work spans the entire gamut of IBM’s businesses, from managing the computing needs of global giants like AT&T and Shell to performing cutting-edge research in fields like visual search, artificial intelligence and computer vision for self-driving cars. One team is even working with the producers of Sesame Street to teach vocabulary to kindergartners in Atlanta."
https://www.nytimes.com/2017/09/28/technology/ibm-india.html
Yeah I mentioned US for that reason. If you include the Indian outsourcing shops then clearly there would be numerous. Honesty though calling them developers is a bit too much. Most of them are used as benchwarmers to inflate numbers and get deals.
IBM is an American company.
100K is a lot, but JP Morgan has like 50K and they are apparently still expanding aggressively.
Wish I could figure out how to do an Ask HN for non-profit hiring. My previous attempts failed.
It is very simple. Pick a nonprofit that has an exciting cause. Go on their website and look for openings. It’s going to need to be a very large org to have developers on staff as almost all IT needs typically are heavily outsourced to vendors. You can also work for one of these vendors.
Expected to leave massive amounts of salary on the table. You could be talking 50-150k less.
Non-profits do layoffs too, unfortunately. In some ways it's almost worse as there's less padding before they're losing money.
Grant funded non profit research is at least pretty predictable. You know you are on a 2-5 year grant and you can help apply for the next one.
Try government.
Though I had no luck finding government jobs, because the red tape is ridiculous.
I have no direct experience with this, but my understanding from some friends who work in (US) government, is that it's an investment of time: you work through the initial red tape, and you get unparalleled job security.
And it doesn't even pay as badly as I think people expect, necessarily. It's not SV money but it's reasonable.
If you know C++ or are Near Omaha, can pass a background check. I know some people that are hiring.
Sadly not (Omaha and C++).
Did they also massively expand their staff during the pandemic like Twitter/FB did?
Edit: looks like they grew headcount by 60% (+500,000 people) in 2020 and 23% (+310,000) in 2021.
Today's announcement reduces headcount by 1% which is tiny compared to their growth.
https://www.macrotrends.net/stocks/charts/AMZN/amazon/number...
Amazon brought on like 300-400k warehouse workers and customer service numbers would also move when that happens. They have a LOT of those workers compared to corporate and engineering. And they move those numbers a lot as well.
Amazon headcount numbers are different because warehouse workers are counted in that.
This is weird because I'm in the middle of the interview process with a division of Amazon.
Disclaimer:
I have a job and haven't been actively looking, but recruiters will reach out and I'll usually go through the interview process if only to practice.
And here we go:
I got the initial email around the middle of September for one particular division. As I went through the initial assessment, that division "met their hiring goals" and I was transferred to another division.
Through September and October, I organized the virtual on-site. And my interview was scheduled for last week. The weeks prior, as we know, the shit hit all the fans. I fully expected to get a "too bad, so sad" email saying my interview was cancelled. It wasn't. I went through the interview and I'm waiting to hear back currently.
But yeah, I would not be surprised to get a rejection. But from the point of view of my experience, nothing they've done or said has made anything seem off.
I've been in a similar situation recently. I passed the interview but the position I applied for (and was really interested in) is no longer open.
The nice thing is that interview results at Amazon are valid for 6 months; my understanding is that once you pass the interviews you essentially have a free ticket for 1 job (at an equivalent level) anywhere in Amazon. And so waiting until things open up in 2023 is an option.
You may well get an offer, but it will probably be deferred to 2023 if so. At Amazon, the interview loop makes a decision regardless of the viability/timing/placement of the actual offer made.
I remember reading somewhere that while Amazon is on a hiring freeze, they still hire to fill positions of those who left the company. So perhaps you're interviewing for one of them.
Wow, you responded to one of those Amazon recruiters. I can see now that it is responses like this that encourages them to keep pushing.
I've removed everything from my linkedin, except my current position, and the only people hitting me up are Amazon recruiters. In fact, once I edited my profile, the rate increased.
This is going to be a terrible holiday season for a lot of people.
And not just because of corporate layoffs.
I'm not disagreeing, but what are you referring to specifically?
Maybe recession?
Ya, must be, and maybe inflation. But, it would be nice to know in case there's something else that's not on our radar.
Unemployment is still near historic lows.
I'm sure the thousands of people layed off and their families affected really care about that "record low unemployment".
Those people received generous severance packages, on top of government unemployment benefits.
> Those people received generous severance packages...
How do you know this? I think its a bit of a stretch to say _everyone_ who has been laid off because of a looming recession has been given a package, unless you just meant the short list of tech in the very specific area of SV. If so I would encourage you to broaden your horizons to think of more than just tech.
If I am to be laid off, I would rather it happen while unemployment is low. This should make it easier to get a new job.
I still sympathize with these people, it sucks to be laid off. They are losing their jobs because someone at Amazon screwed up or took risks the laid off person couldn't control.
Meanwhile, they built the “Amazon Tower” in Berlin (the highest skyscraper in Berlin right now) and are looking to fill it with around 4,000 employees in 2024: https://www-tagesspiegel-de.translate.goog/berlin/hochster-t...
For those of you in the business who missed 2000-2002 and/or to a lesser extent 2008, you have no idea what is coming. Good luck.
> to a lesser extent 2008
Why to a lesser extent? 2008 seemed far worse due to the overall recession impacts and the fact that it wasn't just tech companies. I got laid off from my tech job at a non-tech company for example. Both occurrences wrecked a lot of lives (mine included) though, I'll give you that.
I think 2008 was broader but just from my own personal experience it seemed much worse for tech after the dot.com crash. I worked at the time selling server and storage hardware and after the dot.com crash you could get top of the line servers for pennies on the dollar - this was before AWS et al. It crippled sales for 2 years.
Nobody has any idea what is coming. And I mean that literally in all ways.
Why did this never make it to the front page of hackernews? I had to search it up to find it.
Can't help but be reminded of this scene from "The Fifth Element" https://www.youtube.com/watch?v=r0mO6UY6uTg
"One million... fine, sir... sorry to have disturbed you." looks like kicked puppy
My personal favorite Gary Oldman role.
Trivia.. he hated it and only did it as a favor to Luc Besson.
Last I knew he's never even watched the movie.
which blows my mind because without him it wouldn't be a classic.
> The company has sold hundreds of millions of Alexa-enabled devices. But Amazon has said the products are often low margin and other potential revenue sources such as voice shopping have not caught on.
This is the game, right? For the first time since Alexa launched, Amazon is looking at a painful Q4, so the rest of retail can't cover up the Devices org's big wart.
The recession depending on who you ask seem to be either mild or not happening. All the government indicators (recent inflation, gdp, jobs report) seem to paint a thriving economy.
So why are these companies still shedding jobs? I'm starting to wonder if the tech industry is disproportionately impacted similar to dot com bubble from 2000.
1. Duration. A short and mild recession might be something you hold through. A decade of zero growth -- while technically "no recession for the next decade" -- is quite different, especially for companies (like tech) whose current employment levels are targeted toward growth.
2. Disparate impact. You can have low or no GDP decline while still seeing some sectors take massive short-term and long-term hits.
I assume they see the recession coming and look to shed cost early rather than wait until deep into recession.
Profits will be down so need to offset cost. Keep the share price high and get those option bonuses.
1.6 million counts warehouse employees. Retail and Alexa corporate employees is probably 100k
There has been a lot of talk about a correction coming and a bubble bursting specifically in tech for years now. Is this it?
Probably? But it's mostly just a return to sanity at this point, though it probably will overshoot as these things usually do. Meta going from 47K employees in 2019 to 81K employees in about 3 years was just crazy, for example. How do you even assimilate that many new employees in such a short time?
> But it's mostly just a return to sanity at this point,
That's what the word "correction" implies: That it's going down, not because the business itself is bad or anything in the market has fundamentally changed, but because it was valued "incorrectly" (where "insane" would be an extreme form of "incorrectness"), and that its value is being "corrected".
I see UncleOxidant as saying it's a 2020-2021 correction, distinct from the larger talk of a correction that's been going around for years now even pre-Covid.
I haven't seen signs of that latter, larger one yet. Fingers crossed...
Exactly. Look at graphs of employee growth at the large tech companies between 2019 and 2022 - we're lopping off some of that growth... probably will end up lopping off a lot of that growth before this is over.
All the layoffs announced (sans the Musking that just happened) are in line with normal annual attrition plus a bump given the huge hiring spree during the pandemic to meet pandemic demand. I’ll bet $20 if you took HC growth prepandemic and straight lined it through to today inclusive of layoffs you would see normal YoY growth between those two points, which an aberration in 20/21 of high hiring. I think you’ll see a bit of party hangover and if the whole economy sinks it’ll get worse. But overall I’ve not observed any material structural shift in the world or in tech, unlike say the dot com bust or the global financial crisis. There’s some cold spots though like real estate tech that’ll probably go through a tough time.
I think a lot of folks here have never been through a down cycle before though and anything that’s not frantic growth and double digit comp growth YoY will feel like a nuclear winter.
the correction is happening now. the pandemic pushed all these tech companies up artificially. they hired in record numbers to meet demand and thought it would be permanent/the new floor. The economy has since rebounded and companies are returning to previous levels. The war isn't helping however
>"the pandemic pushed all these tech companies up artificially. they hired in record numbers to meet demand and thought it would be permanent/the new floor."
This is the really surprising thing to me - many(most?) of these companies are data driven companies. Companies with teams of analytics folks, data scientists, modeling-experts and teams of engineers working on tools to do ML and large scale data analytics. Do none of them actually use their tools and internal expertise to model their own hiring practices and historical market trends? Or maybe they did and always knew they would need to do mass layoffs when inevitably the cheap money pump got shut off?
I hope that if we've learned anything from the past few years, it's that you can interpret and manipulate data to make it say whatever you want to say. That's true even when analyzing data about the present, doubly so trying to predict the future.
Being data-driven is a method for justifying decisions. But it's still a human making a decision in the end.
>But it's still a human making a decision in the end
I've got a story here from a previous job that illustrates this.
I used to be part of an Analytics and Forecasting team at a well known non-tech company. It's a global company that sells a lot of things to consumers. This means they strive to have a very good understanding of sales and manufacturing volume because that drives everything from raw material orders and supplier contracts to how much of product to put where so people can go and buy it.
We had short term forecasting teams generating forecasts (at a brand level) and analysts (mostly aggregations, not really statistical inference) that rolled into a medium term analytics/forecasting team(s), that rolled into a long term analytics/forecasting team(s). Not to mention Research teams that did pure statistical and economic modeling to try and understand market factors in a more comprehensive way so they could better inform all these forecasts. All of this went right to the top of the food chain.
The glue between all these teams were managers. And one of the fundamental problem for managers with all of this comes from this simple question - if one of these teams provides a forecast that is very different from the rest, what does that mean? Is that team right or wrong? And how does that information now flow into the other teams so they can incorporate it into the info that goes upstairs.
From this question emerges an astonishing amount of group think. Not just from the company I worked at, but at all competitors as well.
When companies ask "Do we forecast sales to go up" they are really asking "Do we think this market segment is going to go up in the future and we have the right strategy to move up with it?" Cars, Snacks, phones, whatever the market segment, you're really asking how you are doing compared to your competitors in the space.
To understand where you are going, you need to understand how your competitors are doing. This data comes from agencies and consulting houses. But since everybody uses the same data from the same agencies, everybody is feeding each other. What can emerge from this is a massive amount of group think.
I'm greatly simplifying everything of course. When these teams get it right they do amazing stuff like making sure the thing you want to buy is available when you want to buy it. But when they get it wrong, it seems like most everybody else gets it wrong as well. This can slowdown an entire industry as everybody realizes they got it wrong.
The risks of under-hiring if things had continued and not being able to keep up with competitors was probably just too great. It's much easier to simply lay people off if the bubble pops than to play catch up if it doesn't.
What do you do when the model says your favorite project (say the one that got you promoted or is getting you promoted) is a bad idea? Heck, forget fancy modeling, what does an excel sheet say?
As old as the bible, the saying, "Physician, heal thyself!"
I work as a data scientist in the grocery industry, specifically (at least for the past six months) on sales forecasts. Even for relatively short-term forecasts accuracy is surprisingly low, even with lots of data and the most up-to-date forecasting methods, applied by smart people (those who aren't me). I'm not at all surprised that companies can't see precisely when downturns will happen.
> Do none of them actually use their tools and internal expertise to model their own hiring practices and historical market trends?
This! It’s exactly what have occupied my mind since layoffs started. May they did use tools. But, remember the output is a forecast, not a shining light out of a crystal ball. Estimates/Forecasts can go wrong and clearly turned out that way.
No amount of machine learning, analytics, statistics, models, and experts can predict the future.
No of course not but I would think it could certainly help to temper exuberance. Especially if you were considering a spectrum of uncertainties.
They thought there was a real and persistent break from historical market trends, similar to the break from historical remote work trends.
It is not pandemic pushed evaluation, it is $5T injected by Fed in stock market.
which was caused by the pandemic.
People have been saying "the tech bubble is going to burst" since like 2011.
The current round of job cuts and stock drops puts the industry back to ~mid 2020 levels.
So it is definitely a correction, but hardly world ending.
Its a difference now that there are waves of people coming to software from other industries. Its one of the few industries that does not require certification, pays great and you can pick up relatively quickly.
Realistically they’ve been saying this since the 1950s
There was the dot com bubble burst in 2000, so there has actually been one. A few years after the 2008 crash sounds about right to when people started talking about tech bubbles again to me.
I lived and worked through it and I’ve not seen tech slow down measurably, even then. There was a correction, and a shake out, but then it picked up basically where it left off and shot up. There have been other busts over the last 70 years but they’re more like a system that overheats, slows, then resumes.
All the signs were there for everyone to see in the 2000 Dotcom Dotbomb. The root problem was a bunch of investors wildly investing in crappy tech companies, like tinder for cats. There were toxic assets, huge and publicly visible waste, low product output.
This time, there is a lot more growth from many companies but we also see the results of that work, products and services exist as a result. There is waste but not like in 2000.
It wasn’t tinder for cats. It was pets.com that was the poster child.
If so it’s very mild so far
Agreed, these recent moves are not a great sign, but the dot com crash was so much worse from a people and company perspective.
The moment that sticks with me is (former) employees wheeling all the Herman Miller chairs through the parking lot with the facilities guy holding the door open saying "Take it. Take it all..."
That’s every startup failing/divesting right? There’s a moment of chaos where priorities aren’t aligned and company assets disappear.
I just don't see where the tech growth is going to come from to keep the high multiples?
Yup, I'm worried about what else could fall, but I think this was a necessary correction, and hope this stays contained.
Coordinated actions aimed at depressing tech wages and forcing return to office.
It's fascinating how there are so many layoffs going on across the economy and yet unemployment is staying so low.
i think layoffs happen much faster than reporting. also, there's just a lot of people out there and tech is only a small piece of the overall labor market.
Because 10k here and there is pretty meaningless relative to the total size of the labor market.
These layoffs only get press due to the brand names of the companies
> yet unemployment is staying so low.
Let the severance period end.
Funny, I've been getting recruiter spam every week from the same set of people, and their last email 3 weeks ago was titled "AWS - This could be the last chance to join the team!!!"
10 000 out of 1 500 000
1,500,000 includes all the hourly workers but my understanding is that the 10,000 is corporate. Still only 3% of corporate workers which is less than they pip every year
This is the second time in these comments I've seen this distinction held out as self-evidently meaningful. I sincerely do not understand, can someone please explain why laying off salaried workers matters but hourly ones does not?
It is the nature of contract work to be temporary. A full time employee is definitionally a stricter contract between employer and employee that is expected to continue for a longer period of time and represents a more binding commitment.
There is a meaningful distinction between the expected nature of the role and benefits of a contractor vs full time employee.
This isn't to say that laying off contractors doesn't matter, but its not unexpected or as good of a means to understand a company's outlook.
Generally speaking the average annual wage of corporate workers (mostly engineers) will be in the six figures. Hourly wage workers take home (on average) median US annual wages. So laying of 10000 engineers (in terms of immediate $ costs) is the equivalent of laying of approximately 30000 to 50000 hourly wage workers.
Maybe the world is bigger than my brain can imagine but where are all these people going to go? If all big tech companies are having lay-offs and hiring freezes, who's going to absorb that amount of workers?
To other companies. Some are still hiring. Remember how everyone was saying that filling positions was difficult? Well, it's getting much easier now. Keep in mind that not all of these layoffs are for tech workers (many of them are business functions) and that these examples are very visible but the numbers aren't that big in the context of the overall labor market.
Of course it could get much worse than this but we aren't there yet.
Not sure if other states have a similar system, but Washington posts information about layoffs here: https://esd.wa.gov/about-employees/WARN. Looks like Amazon Health Services is getting cut as part of this.
The news here is that amazon is going to start the 2 month+ WARN period for a much larger set of orgs this week. Amazon Care/Health Service layoffs are old news.
Amazon really is something else. Loyalty is really expensive and there'll come a day when they will learn that the hard way. I know these layoffs are because of the uncertainty of the economy but they already have bad rep with things like "hire to fire" candidates, etc...
From people who work high-up in AWS, I heard this doesn't generally affect them.
Them as in higher-ups or did they mean it won't affect their low level workers?
I'm guessing it's a much more recession-proof line of business.
This could be Amazon anticipating a very slow holiday season.
Amazon lists employees at 1.6M employees worldwide. (https://www.macrotrends.net/stocks/charts/AMZN/amazon/number...)
Even if they have 1% churn each month, that's about 16,000 turnover a month. Laying off 10,000 is not news until we find out where the cuts are happening.
This is specifically tech and corporate employees, which is a much smaller pool than the 1.6M you're quoting.
Disclaimer: I work for Amazon (but also haven't stated any opinions)
Yes, we know. That's why I specifically said it isn't news until we find out where those 10,000 people are being hit.
What is the ballpark of corporate employees count?
Hard to tell but probably around 300K.
And once these jobs open up again, the U.S. government will take credit for "creating" the new jobs.
I remember when NYT took pride in its headline writing.
Will they use the 10-15% cut like everyone else?
And they say we are not in a recession.
I think these moves are possible if we're not in a recession. If Amazon underperformed over the year, and its earnings are lower than estimated, they could be simply cutting costs in Q4 to offset the lowered earnings. The cause of that underperformance is really what would tell you if we're headed for a recession and Amazon has their fingers in so many pies it'd be hard to attribute laying off 1/150th of their workforce to the overall economy I think.
That this is happening at a number of big tech companies isn't a surprise I don't think. The biggest layoffs this year so far have been at companies that made large scale changes (Meta, Twitter) or over-hired over the course of the pandemic when that level of business turned out not to be permanent (Stripe, Shopify).
It's possible that this is industry-specific. Tech companies exploded during the pandemic if they had anything to do with stuff you do indoors, and this is the real "post-pandemic" year (talking economically).
Other industries which took it on the chin during the pandemic are recovering well this year, notably anything travel-related seems to be doing incredibly well and some companies are on track for banner years.
That said, I suspect we're going to see a few quarters of stagnant growth (0% to 0.3%) or mild contraction (0% to -0.3%), maybe not enough in a row to declare recession.
Travel is going to crash hard again once the pent-up demand for post-pandemic vacations is fulfilled. Lots of Fortune 500 companies, many of them quite profitable, have implemented travel restrictions within the last quarter for budget reasons.
3.5% unemployment is not a recession.
A couple of industries like tech are having some bubbles popped, and some places like the UK are having a recession, but the US is not in a recession. You all are just too used to 15 years of tech boom so anything different looks like a recession.
US GDP was up 2.6% annualized in 2022Q3 (https://www.bea.gov/data/gdp/gross-domestic-product) and unemployment was 3.7% in Oct2022.
Worth making two observations on that GDP figure:
More importantly: that's a real (inflation backed out) not nominal (inflation ignored) figure
Less importantly: that's an advance estimate, not a final figure.
It's now safe to admit we have been in one and don't have to play the strict interpretation and can carry on with the colloquial interpretation which had been good enough since ever.
Sometimes a recession is also a self-fulfilling prophecy...
We're in a downtown for the tech industry most other industries are fine
Aren't all the big index funds tied to a couple tech giants and a smattering of other companies?
Tech eats the world. When tech goes down, its competitors go bankrupt.
I get we've been cooking the books and printing money during COVID, but shouldn't there be a raw productivity explosion in the US economy with COVID restrictions lifting? Suppressed consumption, increased output, etc?
This does seem like some weird massive manipulation of the economy by the elites to grab more wealth and control. Or it's just some collective revenge against the various antiwork / worker empowerment / etc that came out of COVID to put the proles back in their place.
Or maybe its just that a lot of investment dollars are drying up from overseas with inflation.
Total consumption did not change with Covid, it just went from one part of the economy to another. Kind of like squeezing a balloon - same amount of air, just in a different part of the vessel.
As for the massive amount of manipulation, that was done in plain sight. The fed had injected $$$ and low interest rates into the economy since 2009 and finally the spigot stopped.
Did COVID suppress consumption or just redirect it? Less restaurant meals and more PS5s, and now the pendulum swings the other way as people socialize in person again.
Good question, I suppose. I work in the grocery industry and COVID was absolutely incredible for business -- my yearly bonus doubled. Wouldn't have wanted to own a bowling alley or a movie theatre, though.
That said, we never corrected to the degree the tech industry seems to be now. I'm glad I never followed through with those Facebook recruiters ...
There is no conspiracy, just muddling along as humans do.
Probably we are in for a prolonged stagnation, but even after 11,000 layoffs last week, Meta’s employment level is on par with early 2022, hardly a massive reduction historically.
This sounds like the realtors that say “interest rates are still historically low”
They are. What that means is open to debate, and how you should act based on the current interest rates depends a lot. But simply as a historical matter, current interest rates are lower than the majority of history.
https://www.macrotrends.net/2015/fed-funds-rate-historical-c...
What do they do with 70,000 employees? It's hard to envision.
Exactly. Also many said 'engineers are not affected!'. I'm sorry to say they are.
The delusion and denial about how this is not a tech crash in 2022 is really quite hilarious and I do not believe that it is over just yet.
It’s a 0.7% layoff. Not even a whole percentage point.
A useless sentiment when you are 1 of the 10,000+ about to lose their job before the holidays in a recession.
Maybe Bezos can start giving his fortune away philanthropically starting with these laid off people.
Well shit
Covid boom is over ???.
Looks like a lot of new people will rush to http://www.bestpaidremotejobs.com again.
The latest wave of followers came due to the latest Twitter and Meta layoffs.
Starting to feel like that site is a bit like the guy selling pickaxes to prospectors who have little chance of finding any gold.