Amazon has said it is laying off more than 18,000 employees globally, far more than speculated in November when the online shopping leader announced it would eliminate some positions.
In a memo sent to staff on Thursday, Amazon CEO Andy Jassy said the decision was the result of "the uncertain economy" and rapid hiring over the past several years, similar to other tech giants announcing redundancies in recent months.
It is believed that Amazon is still working through the detail of the layoffs, and it is unclear how many of the estimated 5,000 permanent Amazon workers in Ireland will lose their jobs.
The company is set to open a 630,000 sq ft fulfilment centre at Baldonnell Business Park employing 500 staff in the spring. Amazon established its first Irish office in September 2004, opened a customer service centre in Cork in April 2006, and launched the first Amazon Web Services (AWS) infrastructure outside the US in Ireland in November 2007.
The company said AWS, its web-hosting business, supports 8,700 jobs directly and indirectly in Ireland, including 3,100 direct hires, 3,900 contractors and sub-suppliers, and 1,700 from income generated by AWS investments.
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In addition to layoffs in Amazon's devices and books divisions announced last year, the brunt of the redundancies will be made in Amazon Stores and in the company's people experience and technology solutions business, but several teams will be impacted.
Jassy said management was "deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted.
"We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support."
He added that the announcement had been brought forward following an employee leak, and that affected employees would be informed nearly two weeks from now on 18 January.
"Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so," Jassy continued.
"These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles."
Reacting to the announcement, a spokesperson for IDA Ireland said the state agency for foreign direct investment is in regular contact with Amazon in Ireland and the US and will be on an ongoing basis.
Amazon recorded net income of $33.4bn or $64.81 per share from net sales of $469.8bn in 2021. In its third quarter results, the company forecast fourth-quarter sales of $140-148bn, which would bring revenues for the year to above $500bn.
However, the group reported net losses in the first and second quarters amounting to $5.8bn after marking down its investment in Rivian Automotive, which produces electric delivery vans for the firm.
Rivian which has seen its share price fall 82% in the past 12 months and its losses widen to $1.7bn as it has had to battle rising material costs while expanding production.
As of December 2021, Amazon employed some 1.6m people globally. The 18,000 job losses announced would equate to around 1.1% of its workforce. If the level of redundancies globally is maintained in Ireland, approximately 56 Irish jobs would be cut.
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