First major tech worker purge of 2023 hits Amazon and Salesforce staff

Both vendors have announced layoffs in the thousands as a result of economic conditions

Employees at tech giants Salesforce and Amazon have been dealt a blow to the start of 2023 with mass layoffs across both companies.

Amazon CEO Andy Jassy announced today the vendor will be axing just over 18,000 roles - the largest cull in its almost 30-year history.

Amazon's cuts will affect its corporate and tech ranks, with the majority of eliminations affecting the People, Experience, and Technology (PXT) and Amazon Stores organisations.

Jassy said in a public note to staff that communications with impacted employees, or where applicable in Europe with employee representative bodies, will start January 18.

Staff reductions had been previously announced November 2022 which largely affected Amazon's Devices and Books businesses.

Jassy added the tech titan's annual planning has been "more difficult" given the uncertain economy coupled with rapid hiring over the last several years.

"S-team and I are deeply aware that these role eliminations are difficult for people, and we don't take these decisions lightly or underestimate how much they might affect the lives of those who are impacted," Jassy wrote.

"We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support."

The tech industry made more than 150,000 job cuts in 2022, according to Layoffs.fyi - a platform that has been tracking tech layoffs since Covid-19 - a figure which may continue into the rest of 2023.

Salesforce slashes 7,000 staff

Cloud-based software firm Salesforce also announced it was reducing operating costs by downsizing its number of offices and trimming its workforce by ten per cent, impacting more than 7,000 staff.

In a letter to employees, Salesforce CEO Marc Russell Benioff blamed the over-hiring of people during a period of accelerated revenue through the pandemic for the layoffs as the company entered a global economic downturn.

In a separate Securities and Exchange Commission filing, the company estimates the cuts will lead to approximately $1.4bn to $2.1bn in charges, of which $800m to $1bn is expected to be incurred in Q4 of fiscal 2023.

These charges consist primarily of $1bn to $1.4bn in costs related to employee transition, severance payments, employee benefits, and share-based compensation; and $450m to $650m in exit charges associated with the office space reductions.

"The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," Benioff wrote to employees.

"With this in mind, we've made the very difficult decision to reduce our workforce by about ten per cent, mostly over the coming weeks.

"I've been thinking a lot about how we came to this moment. 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."