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Amazon, Slashing 18K Jobs, Braces for UK Strike

Amazon’s new year is off to a newsworthy start.

CEO Andy Jassey told employees in a memo dated Jan. 4 that the e-commerce giant plans to lay off more than 18,000 including headcount reductions that started in November. This comes after the Seattle company previously froze hiring in its retail division as well as at the corporate level. Jassey blamed economic uncertainty and Amazon’s recent pandemic-era hiring spree as factors behind the job cuts, which will help the company tighten its belt amid slumping financial performance. Amazon, which will start notifying affected employees and reps on Jan. 18, said it’s reporting the cuts after a staffer “leaked this information externally.”

The layoffs lend to credence to one analyst’s speculation that Amazon could pull a Walt Disney and see founder and executive chairman Jeff Bezos return to the CEO role he left just more than a year ago.

“Jeff Bezos spent 27 years at Amazon and has been gone for less than two. In 2023 he pulls a Bob Iger and returns to steady the ship,” Michael Batnick, managing partner at Ritholtz Wealth Management, wrote in year-ahead predictions cited by Marketwatch.

Amazon CEO Andy Jassey at the New York Times DealBook Summit in November 2022.

The mega corporation is also bracing for its first-ever United Kingdom labor strike after the GMB Union, which counts 500,000 public and private-sector members, on Wednesday said workers at one of Amazon’s Coventry warehouses in central England plan to walk out on Jan. 25.

“GMB urges Amazon UK bosses to give workers a proper pay rise and avoid industrial action altogether,” said Amanda Gearing, GMB senior organizer, after 98 percent of workers voted to strike in protest of the company’s “50 pence per hour pay offer,” amounting to 60 cents hourly.

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Workers back in the U.S. have also voiced their displeasure at proposed pay increases and agitated for better compensation. What’s more, the Amazon Labor Union recently retained legal representation to help Amazon fulfillment employees navigate workers comp benefits—news that came as yet another worker died on the job in a Colorado facility.

Amazon is considering renting out unused cargo space on its air fleet.
Larry MacDougal / Associated Press

In other cost-saving and revenue-driving moves, Amazon is reportedly trying to sell unused space on its cargo planes to recoup on its Covid-era investments.

According to Bloomberg, Amazon has recently retained experts experienced in marketing cargo space to help make use of its 100-plane fleet’s excess capacity. Two of the retained executives say that empty jets flying back to the mainland from Hawaii, for example, could be filled with regional goods such as pineapples, while those returning from Alaska could carry salmon.

Amazon didn’t immediately respond to a request for comment.

These individuals said that Amazon’s original plan for its air fleet remains in place despite growing pains and pressure to create new revenue streams. Global demand for air cargo fell 13.6 year over year in October, according to the International Air Transport Association (IATA). North American carriers in particular saw an 8.6-percent dip in cargo volume compared to the year-ago period.

“Cargo markets are expected to come under increased pressure in 2023,” IATA said in a statement last month. IATA expects to see 2023 yield revenues of $149.4 billion—$52 billion less than 2022—but still $48.6 billion stronger than 2019. Volumes are expected to drop to 57.7 million tons, down from a peak of 65.6 million tons in 2021.

“As belly capacity grows in line with the recovery in passenger markets, yields are expected to take a significant step back,” IATA said. It projected a 22.6-percent decline in cargo yields, “mostly in the latter part of the year when the impact of inflation-cooling measures are expected to bite.” Adding context, it said cargo yields grew 52.5 percent in 2020, 24.2 percent in 2021 and 7.2 percent in 2022.

However, “even the sizable and expected decline leaves cargo yields well-above pre-Covid levels,” according to IATA. Despite recent headwinds, Amazon announced in October that it would add 10 Airbus A330-300 freighters in partnership with Hawaiian Airlines beginning in 2023. The airline will “maintain and fly Amazon’s A330s under Hawaiian’s FAA air carrier certificate to move cargo between airports near the online retailer’s operations facilities,” it said in a statement last fall.