Amazon CEO Andy Jassy, told staff today that the company would lay off over 18,000 workers worldwide. The figure is significantly more than the 10,000 layoffs it announced in November. Jassy blamed economic uncertainty and the company’s rapid pandemic expansion for the cuts.
The majority of the lob losses will be in Amazon Stores and its People, Experience, and Technology organizations. As there are around 1.5 million Amazon employees, the cuts represent about 6% of the tech giant’s workforce.
Amazon’s decision is in line with moves in other tech companies to reduce their workforces. Yesterday, Salesforce, a leader in business software solutions, announced it would let 10% of its employees go. Meta, Snap, Doordash, and Twitter have also slashed jobs in recent months.
January is historically a bad month for layoffs and some fear is that what’s happening in tech could spread to other parts of the economy. Right now, the labor market is relatively strong — in spite of high inflation, aggressive interest rate hikes, and fears of a potential recession. The Federal Reserve predicts that unemployment could increase to 4.6% by the end of next year, up from the current 3.7%. To put that figure in context, that could mean around 1.5 million additional people without work in the U.S.
If you’re worried about losing your job, there are steps you can take today to prepare. Start by taking a look at your finances and working out how much you spend each month. Do you have enough cash stashed away in an emergency fund to see you through three to six months without work? If not, January might be a time to aggressively boost what’s in your savings account. If you carry high interest debt, look at ways to pay it down as it can make life more difficult when you don’t have money coming in.
Work-wise, take some time to think about what you want. If you’re happy in your current place of employment, perhaps there are ways you can step things up by taking on extra responsibility or contributing in another area. If you know you want to change jobs or move into a new industry, what skills can you transfer? What qualifications or extra training might you need? Who might help you along the way?
It’s also a good idea to think about things like health insurance and your employer retirement plan, if you have one. If you have health insurance through work, you’ll have a couple of options. There’s a law called COBRA that lets you pay and keep your existing coverage for up to 18 months. But this may not be the cheapest route. You don’t have to make any decisions now, but it’s good to understand where you stand.
Similarly, if you have a 401(k) with your employer, think about whether you’ll roll it into an IRA, move it to a new employer, or leave it where it is. If you’re thinking about cashing it out, bear in mind that this can have tax implications and impact your ability to retire when the time comes. As with your insurance, it’s more about beginning the thinking process than finding a definitive answer. The more reflection you do while things are relatively stable, the easier it will be to handle a change in your circumstances.
Job losses can be difficult to handle at an emotional and financial level. But if you have some cash in the bank and have started to plan out how you might manage, it will ease some of the pressure if you do get let go.
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