Not so long after 20 U.S. cities were named to be finalists for the location of Amazon.com Inc.’s (NASDAQ: AMZN) second headquarters (aka, HQ2), the company is reportedly laying off employees at HQ1 in Seattle and other locations around the world.
The Seattle Times reported Monday morning that an unnamed source told the newspaper that “several hundred” headquarters staff are being fired today, along with “hundreds more elsewhere in Amazon’s global operations.” Amazon’s Seattle headcount has grown from 5,000 in 2010 to more than 40,000 today, according to the Seattle Times report.
In a statement, Amazon only acknowledged the basic facts:
As part of our annual planning process, we are making head count adjustments across the company — small reductions in a couple of places and aggressive hiring in many others. For affected employees, we work to find roles in the areas where we are hiring.
The Seattle layoffs hit the company’s consumer retail division the hardest, sources told the paper. Rapid growth over the past few years, some employees said, have pushed some corporate units over budget and added unnecessary staff to other units. Amazon already had imposed hiring freezes in some areas, reducing the number of job openings in Seattle to multiyear lows. Open listings for corporate jobs not including warehouse positions totaled 12,500 on Monday, according to the Seattle Times.
One manager told the paper that Amazon executives “wanted to put more pressure on managers to weed out lower performers and enforce spending discipline after the rapid growth of recent years.” One former Amazon employee told the Seattle Times that using the company’s annual performance reviews to weed out low performers is a “well-loved strategy” at the e-commerce behemoth. An Amazon spokesman denied that the company uses its performance review process “to achieve head-count goals.”
Any of the HQ2 finalists want to reconsider their incentive offers to include some job guarantees in exchange for massive tax breaks?
Investors, of course, are fired up by the job cuts. Amazon’s stock was up more than 3% in the noon hour Monday to $1,383.18, in a 52-week range of $828.55 to $1,498.00. The 12-month consensus price target for the stock is $1,640.59.