Amazon India Implements Layoffs Across Multiple Functions: Implications and Challenges Ahead

Highlights

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• Amazon implements layoffs in India, impacting at least 500 employees across different functions.

• Layoffs are part of global workforce reductions as Amazon faces slowing growth in its ecommerce and cloud businesses in India and other markets.

• The company is providing support to affected employees, including separation payments, transitional health insurance benefits, and external job placement assistance.

• In the ecommerce business, Amazon has shut down certain seller support functions and faced regulatory challenges regarding inventory control.

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Amazon, the Seattle-based technology giant, is implementing layoffs in India as part of its global workforce reductions. The company is letting go of at least 500 employees in India across different businesses and functions, including Amazon Web Services (AWS), human resources, and support functions . The layoffs are currently underway and are expected to continue for a few more weeks .

The move comes as Amazon faces slowing growth in its ecommerce business and cloud business in India and other markets. The company had announced in late March that it would fire about 9,000 employees globally, impacting its Amazon Stores and PXT organizations. Amazon CEO Andy Jassy said in a blog post that the company was working to support those who were affected and was providing packages that included a separation payment, transitional health insurance benefits, and external job placement support.

In its ecommerce business, Amazon has shut down some of its seller support functions in India, such as Amazon Digital Kendra and some of the seller onboarding functions in tier-2 cities. One of the sources said that Amazon Digital Kendra could be revamped and relaunched soon. The company has also faced regulatory challenges in India, as it had to stop operations of some of its businesses where it held stakes in sellers, such as Appario, to comply with the rules that do not permit foreign-owned entities running online marketplaces to have control over their inventory.

In its cloud business, AWS, Amazon has seen a slowdown in growth as its business customers have clamped down on spending amid the turbulence caused by the pandemic. Amazon CFO Brian Olsavsky told analysts in April that the growth from AWS would slow further as customers adjusted to the new normal.

This is not the first time that Amazon has laid off employees in India. The company had previously announced in January that it would fire around 18,000 employees globally, following the rout of tech stocks. ET was the first to report in November last year that Amazon would be axing jobs in India as part of its global plans. The company had also shut down multiple businesses in India late last year, such as its edtech, food delivery and wholesale distribution businesses. Over 100 Employees in Video Games Division were also asked to leave in the month of March this year.

Amazon reportedly has about 1 lakh employees in India, but the company has reduced the headcounts by 1,000. However, there is no official confirmation on this from the company. An official email was recently sent to Amazon India employees, which asked them to meet the leadership team on a specific date to get more clarity on the layoff process. The company also said that it would provide five months of severance pay to the employees. Some of the employees who have been laid off by Amazon are looking for jobs via LinkedIn and other platforms.

Amazon's layoffs in India across various functions reflect the company's strategic adjustments to navigate changing market dynamics. With slowing growth in its ecommerce and cloud businesses, Amazon has been streamlining operations and reducing headcounts. While the company aims to support affected employees with comprehensive packages, the challenges posed by regulatory compliance and economic uncertainties have contributed to these difficult decisions. As Amazon continues to adapt to the evolving landscape, the impact of these layoffs will be closely observed, and affected employees are actively exploring new opportunities to secure their future.