Amazon Layoffs In The US May Have Repercussions On Its Indian Ecommerce Operations

With its ecommerce business on thin margins and AWS clocking sizeable revenue, Amazon seems to be caught in the middle of restructuring. As per reports, the company has laid off hundreds of its employees in the US.

Armed with a robust cloud infrastructure, as Amazon shifts its focus towards AI-enabled Alexa, the ecommerce behemoth has claimed that certain mature areas of its business will no longer require as much staff, reports Reuters quoting an Amazon insider.

Jeff Bezos had stated earlier this year, “Our 2017 projections for Alexa were very optimistic, and we far exceeded them.”

Recently, Amazon also opened an IoT and AI-enabled offline store. At the same time, it is also focusing on expanding its grocery store under Prime Now, delivering grocery products within two hours at wholesale market prices.

The company has also started increasing the deployment of robots at its warehouses.

The layoff heat, therefore, might impact its Indian ecommerce operations as well, given that Amazon India is aggressively pushing AWS powered by Alexa and other AI products in the country.

Last year, Amazon India had also jumped into the digital payments space, launching its own UPI-based wallet Amazon Pay.

In an interaction with Inc42, an Amazon spokesperson, however, denied any kind of impact on the company’s Indian operations. “We continue to hire rapidly for all our headcount requirements for India,” he added.

In response to our queries, we further turned to Amazon jobs platform to get a view of the open positions for India.

Once an ecommerce startup, Amazon never left its startup approach. The company has been hiring aggressively in last couple of years. In India too, amidst its efforts to get ahead of rival Flipkart, Amazon has already invested $4.74 Bn to boost its presence in different verticals such as ecommerce, logistics, food retail, digital payments and more.

Is it really about cutting off manpower? Maybe not. Layoffs might be the result of expansion or a shift in its focus. Reuters suggests that the company will continue to hire people more aggressively as part of its expansion plan.

As per the report, the Seattle-based company has been on a hiring spree, creating some 130K jobs worldwide in 2017 and announcing plans to open a second headquarters in North America, anticipating up to 50,000 more jobs there.

Its full-time and part-time headcount surged by 66% in the fourth quarter of 2017 to 566K from a year earlier. The figure includes employees at Whole Foods Market, which Amazon acquired in a $13.7 Bn deal last year.

With increasing profit share coming from Amazon AWS’ cloud offerings and Alexa AI, Amazon (.com) recently reported a 38% jump in fourth-quarter sales to $60.5 Bn. Given that Amazon India is fueling around $500 Mn in its grocery business and expanding AWS’ reach to smaller cities, restructuring manpower ratio appears to be inevitable.