CEO Andy Jassy had earlier hinted about the layoff, however, he had not clearly specified the number of employees to be laid off. The New York Times had, in November, reported that the company was considering laying off employees.

However, a recent report now claims that the number of employees likely to be fired has now increased to 20,000 and that people at all levels are likely to be fired by the company. Recently, Amazon’s CEO announced that they would continue the process of a layoff and that the employees who will be impacted will be informed after everything is assessed by the company.

Eoin Treacy's view

Amazon is a low margin business. The company just about breaks even on the high volume online marketplace it is synonymous with. Profits are raised first from the Web Services division and more recently from advertising. In boosting advertising and pay-to-play models, the company has taken the bet that convenience trumps quality assurance. It’s not clear that was the right move.

The more pressing issue is today is December 6th. The mechanism through which sellers send inventory to Amazon warehouses has been malfunctioning since the 1st and is not yet resolved. I don’t like the coincidence of mass firings and sudden unexplained tech issues in a major tech company.

Replenishing inventory in the busiest month of the year is growing progressively more difficult. Q4 earnings in February are likely to surprise on the downside as a result.
The share continues to extend its downtrend.