WEBVTT - Spencer Soper on Amazon Job Cuts (Audio)

0:00:00.000 --> 0:00:02.800
<v Speaker 1>As well as we have been reporting, Amazon has confirmed

0:00:02.800 --> 0:00:06.800
<v Speaker 1>plans to eliminate just a eighteen thousand jobs. Joining us

0:00:06.800 --> 0:00:10.080
<v Speaker 1>now to discuss some more. Spencer Soaper Bloomberg Tech Reporter

0:00:10.760 --> 0:00:14.920
<v Speaker 1>spends eighteen thousands more than what we heard about just

0:00:14.960 --> 0:00:17.759
<v Speaker 1>a few months ago. But put us in put it

0:00:17.760 --> 0:00:21.560
<v Speaker 1>in perspective for us. Amazon is a huge company, which

0:00:21.560 --> 0:00:24.720
<v Speaker 1>divisions are going to be affected here. Yes, so they've

0:00:24.760 --> 0:00:27.480
<v Speaker 1>got as of September thirty, they have more than one

0:00:27.480 --> 0:00:30.240
<v Speaker 1>point five million globally. So this is like, you know,

0:00:30.320 --> 0:00:33.839
<v Speaker 1>like a little more than of their overall workforce. Granted,

0:00:33.880 --> 0:00:38.200
<v Speaker 1>most of that workforce are you know, warehouse workers who

0:00:38.240 --> 0:00:41.720
<v Speaker 1>move inventory around. Uh, their their corporate ranks are more

0:00:41.720 --> 0:00:44.760
<v Speaker 1>about three and this eighteen thousand is going to come

0:00:44.800 --> 0:00:47.320
<v Speaker 1>out of the corporate workers. UM, it's largely going to

0:00:47.400 --> 0:00:50.120
<v Speaker 1>be it's most the most mature part of its business.

0:00:50.159 --> 0:00:54.560
<v Speaker 1>It's you know, it's online UM store as well as

0:00:54.600 --> 0:00:57.400
<v Speaker 1>some of the brick and mortar initiatives that they've launched recently.

0:00:57.800 --> 0:00:59.639
<v Speaker 1>And then also it's going to be like human resources

0:00:59.640 --> 0:01:03.400
<v Speaker 1>function like recruiting and onboarding people because they're not gonna

0:01:03.400 --> 0:01:05.400
<v Speaker 1>be doing that much because they're not hiring as many people.

0:01:05.680 --> 0:01:09.320
<v Speaker 1>That's that's sort of think it's interesting that they acknowledge

0:01:09.360 --> 0:01:12.000
<v Speaker 1>that they hired too many people during the pandemic. So

0:01:12.040 --> 0:01:15.160
<v Speaker 1>when we see these cuts now, is it because of

0:01:15.280 --> 0:01:19.360
<v Speaker 1>falling demand or that they just think they hired too

0:01:19.360 --> 0:01:22.479
<v Speaker 1>many managers and they don't need them. Yeah, it's part

0:01:22.560 --> 0:01:26.160
<v Speaker 1>of laying you know, leveling off. And it's also the

0:01:26.160 --> 0:01:28.920
<v Speaker 1>fact that because things leveled off, Amazon has always hired

0:01:28.959 --> 0:01:31.480
<v Speaker 1>like crazy, and generally when they decide that they don't

0:01:31.480 --> 0:01:32.920
<v Speaker 1>need a team, they've always been able to kind of

0:01:32.959 --> 0:01:36.800
<v Speaker 1>absorb people within some other new division that's doing well

0:01:36.920 --> 0:01:39.280
<v Speaker 1>or growing, and so that's not the case now. So

0:01:39.319 --> 0:01:41.000
<v Speaker 1>the rare thing here is that they had to resort

0:01:41.040 --> 0:01:44.039
<v Speaker 1>to a to a layoff, whereas whereas usually Amazon can

0:01:44.120 --> 0:01:47.319
<v Speaker 1>just kind of, um, you know, reassign people that that

0:01:47.400 --> 0:01:49.440
<v Speaker 1>are on something that's shutting down or that it's pruning

0:01:49.720 --> 0:01:51.880
<v Speaker 1>to some other function and they just don't have enough

0:01:52.200 --> 0:01:54.240
<v Speaker 1>enough spaces for all of these extra people. Right now,

0:01:55.120 --> 0:01:58.560
<v Speaker 1>we did see Amazon shares rise and after hours trade.

0:01:58.600 --> 0:02:00.400
<v Speaker 1>What does this mean for the company in terms of

0:02:00.600 --> 0:02:05.440
<v Speaker 1>costs and for its longer term future? Well, in terms

0:02:05.480 --> 0:02:08.440
<v Speaker 1>of cost definitely on the on the hiring and onboarding side, right,

0:02:08.480 --> 0:02:11.600
<v Speaker 1>it just means okay, they definitely expect to plateau for

0:02:11.639 --> 0:02:13.959
<v Speaker 1>a while in terms of the manpower because they're they're

0:02:14.040 --> 0:02:17.480
<v Speaker 1>letting go this whole basically teen that was this set

0:02:17.560 --> 0:02:21.160
<v Speaker 1>up to keep up with this rapid rapid demand expansion

0:02:21.160 --> 0:02:23.240
<v Speaker 1>that they had in terms where they just constantly needed

0:02:23.280 --> 0:02:26.320
<v Speaker 1>to constantly hiring and recruiting more and more people. So

0:02:26.400 --> 0:02:28.800
<v Speaker 1>it does look like it's gonna gonna uh, you know,

0:02:28.840 --> 0:02:31.720
<v Speaker 1>their their employment needs. They're expecting to plateau for a

0:02:31.720 --> 0:02:34.400
<v Speaker 1>bit and level off. We're probably just gonna see more

0:02:34.480 --> 0:02:39.320
<v Speaker 1>targeted and focused uh uh, you know investment and expansion

0:02:39.320 --> 0:02:42.600
<v Speaker 1>from Amazon going forward as opposed to really you know,

0:02:42.680 --> 0:02:45.280
<v Speaker 1>historically it's just been this this race to uh to

0:02:45.480 --> 0:02:50.360
<v Speaker 1>meet meet capacity spencer in thirty sentence or so, is

0:02:50.400 --> 0:02:53.200
<v Speaker 1>this the main way to cut costs with people or

0:02:53.240 --> 0:02:55.760
<v Speaker 1>are there other ways that Amazon is doing so as well.

0:02:56.520 --> 0:02:58.200
<v Speaker 1>They've had a couple of other things that they're doing.

0:02:58.280 --> 0:03:02.799
<v Speaker 1>You know, they've backed off some warehouse expansions. UM. We

0:03:02.840 --> 0:03:04.840
<v Speaker 1>had a scoop a couple of weeks ago about they

0:03:04.880 --> 0:03:08.000
<v Speaker 1>were looking to sell um excess space on their cargo planes.

0:03:08.360 --> 0:03:10.120
<v Speaker 1>So there's some other ways to try to, you know,

0:03:10.200 --> 0:03:12.880
<v Speaker 1>either either get some revenue from the extra space they have,

0:03:13.360 --> 0:03:17.639
<v Speaker 1>or cut or cut costs. Besides just besides this cutting job, Spencer,

0:03:17.680 --> 0:03:20.800
<v Speaker 1>thank you very much for joining US. Spencer Soaper, Bloomberg

0:03:20.840 --> 0:03:21.600
<v Speaker 1>Tech reporter,