Amazon, the second largest U.S. based corporate employer, will be instituting a large number of layoffs at their Seattle headquarters in Washington over the next few months, the Seattle Times reported.
Amazon was founded in 1994 by Jeff Bezos and stood out by being one of the first Fortune 500 companies to sell their goods over the internet.
However, this company has done more than just service its customers and deliver thousands of packages across the United States as well as to Europe.
By establishing and expanding its headquarters in Seattle, The Seattle Times reported that employment rates reached an all-time high and the housing value of the surrounding areas saw a sharp increase.
Over the past eight years, this “customer-obsessed” company has expanded from just 5,000 employees to over 40,000 in Seattle alone, leading the offices to be overstaffed and lacking adequate funds. CNN found that worldwide, they employ more than 560,000 people.
“In analyzing their stock, [I found that] that they are just growing too quickly,” said junior Will Sperduto, a business administration major. “These low interest rates have created a bubble and Amazon is just one of the victims that has been fooled by these artificial interest rates.”
MarketWatch reported that through many mergers, Amazon has branched out in many directions and now owns Whole Foods, Zappos, Twitch, IMDb, Goodreads as well as so many others. They are even planning on launching “Shipping with Amazon” which would allow Amazon to deal directly with the shipping between their business and customers and create competition with FedEx and UPS.
The most recent calculation of Amazon’s general and administrative expenses, provided by the Seattle Times, totaled $2.6 billion, a 53 percent increase from the previous year’s expenses.
“When I looked at the numbers, it’s their e-commerce not making a lot of money, it’s their cloud computing business that is making the money,” said business administration sophomore Alexis Tucker.
In their effort to consolidate, a career coaching program called “Pivot” was introduced to office managers, the Seattle Times further reported.
Low level performers can either go through and complete the program or take a severance and leave the company.
Even though this program does help alleviate some of the staff overflow, an Amazon spokesperson stated that, “We use our performance-management process to recognize talent, help employees develop their skills, and in some cases, make employees aware that they are underperforming. We do not use our performance management process to achieve headcount goals.”
Despite the hiring freezes, Amazon continues to hire thousands of new employees to work on their Amazon web services and Alexa software teams, which the Seattle Times reported, makes up 60 percent of job opening listings.
This downsizing news also comes at a time when the company is in the process of looking for a space to build their second headquarter building, HQ2, a project that will at minimum cost $5 billion dollars to build and operate, The New York Times reported.
Some of the target cities include Newark, New York City, Boston, Miami and Pittsburgh along with 15 others. A date to announce the winning city has not been confirmed.