Big Tech continues its big jobs shedding in 2023 as two major players announce deep cuts to start the year. Amazon is axing 18,000 corporate employees, nearly double previous estimates, while Salesforce announced a 10% staff reduction impacting 8,000 workers.
Both companies cite the current economy and over-hiring the past few years as factors. Amazon’s job cut is easily the largest in the company’s history. Amazon doubled its workforce from 2019 to 2022, peaking above 1.6 million employees. Salesforce also roughly doubled its employee count from 2019 to 2022.
“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” Amazon CEO Andy Jassy told employees in a message announcing layoffs Wednesday. The majority of eliminations will come from the Amazon Stores and People, Experience, and Technology (PXT) teams.
“I’ve been thinking a lot about how we came to this moment,” Salesforce CEO Marc Benioff wrote to his employees. “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”
Benioff has previously aired frustrations on the company’s Slack channel that workers hired during the pandemic have “much lower productivity.”
The New Year layoffs follow the Big Tech bleeding of 2022. Layoff tracker layoffs.fyi reports that 1,018 tech companies laid off 153,678 employees in 2022. Analysts expect cuts to continue in 2023, especially as many predict a recession is coming amid more Federal Reserve tightening and weakening market conditions.
Despite the clear warning signs in the economy, jobs data still paints a strong picture. The latest job openings report released Wednesday by the Bureau of Labor Statistics showed that on the last day of November, job openings were little changed at an enormous 10.5 million, with hiring increasing in sectors like health care and social assistance. December’s jobs report, due Friday, is also expected to show the U.S. adding hundreds of thousands of jobs for the month.