Haven’t Pink-Slipped Anyone Yet: Amazon To Labour Ministry

In a meeting with the labour ministry on Friday (November 25), Amazon India maintained that it has not fired a single employee in India yet. 

However, sources have told Inc42 that the employees are being asked to resign voluntarily. The sources added that such voluntary resignations within Amazon would continue unabated over the next two to three months as several Amazon verticals have been impacted due to the ongoing macroeconomic headwinds.

The development comes three days after the Ministry of Labour summoned Amazon India executives, following employee union Nascent Information Technology Employees Senate’s (NITES) request for government intervention on the alleged layoffs being done by the ecommerce giant in India.

Incidentally, no NITES representative was present in the meeting. The employee union has written to the labour ministry to hold another meeting and is awaiting the ministry’s response, a NITES spokesperson said.

Inc42 sources said that the ecommerce major has also not fired employees from Alexa devices and Kindle verticals, as was communicated in the company’s November 18 announcement.

However, a few senior developers have been put on performance improvement plans (PIPs) after a review of nine months from within these verticals.

Queries sent to Amazon India did not elicit a response till the publishing of this article. 

The ecommerce giant is said to have undertaken an organisational restructuring. On Thursday (November 24), the ecommerce major announced that it would be shutting down its edtech vertical, Amazon Academy.

Employees from these verticals have been offered to either join other business verticals or resign and take a severance package, sources told Inc42.

Further, clarifying the details related to the alleged layoffs, the ecommerce major told the labour ministry officials that the documents and case studies presented by NITES are not relevant to India, as those are related to the layoffs that it has conducted elsewhere in the world. 

Amazon would continue to conduct layoffs across its retail segment across the world in the face of macroeconomic headwinds, sources privy to the development told Inc42. It is imperative to mention here that Amazon does not have a retail business in India and operates only as an online marketplace in the country.

Amazon India’s Controversial Separation Policy

Amazon India also told the labour ministry that there are misconceptions around its Voluntary Separation Program (VSP) policy in India, which has become a bone of contention between the ecommerce major and NITES, sources told Inc42.

Harpreet Singh Saluja, the general secretary of NITES, said that the IT/ITeS employee union is against the provisions of the VSP policy, as Amazon did not seek approval from any competent authority before introducing the policy in the country.

In its petition, NITES alleged that the ecommerce giant could not conduct layoffs without getting permission from the relevant authority. In conducting layoffs, Amazon India has violated Indian law, the employee union said.

The ecommerce major has recently started downsizing its global headcount, following the likes of Meta, Twitter and other big tech companies. According to media reports, Amazon would slash around 10,000 jobs across corporate and technology verticals. 

Amazon’s Presence In India

India is a key market for Amazon, and about 7% of its total global workforce of 1.5 Mn works in the country.

In a blog post in May this year, Amazon India said it created as many as 1.16 Mn direct and indirect jobs in India. The ecommerce giant also pledged to create 2 Mn direct and indirect jobs by 2025. 

Amazon said it helped create more than 135K direct and indirect jobs across IT, ecommerce, logistics, manufacturing, content creation and skill development industries in 2021 alone.

On the business front, Amazon is second in terms of the share it holds in India’s $200 Bn ecommerce market, behind Walmart-owned Indian ecommerce giant Flipkart.

Amazon narrowed its loss by 23% to INR 3,649.2 Cr in FY22 from INR 4,748.1 Cr in FY21 in India. The ecommerce major reported an over 32% increase in its operating revenue to INR 21,462 Cr in FY22 from INR 16,200.3 Cr in FY21.