, Inc. (AMZN) Gets “Lean” And “Mean” With Staff Reductions At Its Seattle Headquarters

Updated on, Inc. (NASDAQ:AMZN) is not a company that is in trouble. In an era when many retailers are closing stores (Macy’s, Sears, K-Mart, Toys ‘R Us), Amazon continues to thrive and expand. From an online book retailer that sold its first book in 1995, Amazon now offers virtually any product a consumer may want, either through its own inventory or through partnerships with other sellers on its site.

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So, why has Amazon fired hundreds of workers at its Seattle headquarters?

According to Jeff Bezos, this move is the result of conducting a “head count” of employees and needs, and adjusting employment numbers accordingly.

The number of fired employees represents just a small percentage of Amazon employees – 300,000 in the U.S. alone. And, there are still 4,000 open positions in Seattle and 12,000 internationally. Obviously, the company is not downsizing, but it does look like it is re-configuring its workforce based upon its projected future. And, it is also looking for a second headquarters in the U.S., which of course will require additional staffing there, up to 50,000 according to Amazon.

The Seattle cuts are all in the retail division, according to one manager. It is part of an annual drive to eliminate those who are the most low-performing; however, fired employees were all encouraged to apply for other jobs that are still open in Seattle.

Additional Expansion into New Industries?

Amidst this news, which is really not big news, Amazon has been the subject of some recent media stories about areas into which it may be considering expansion.

  1. There has been recent talk that Bezos, Warren Buffett, and Jamie Dimon are planning a not-for-profit healthcare enterprise, as an optional, lower-cost insurance. While such a plan would begin with their own employees and families, there is also contemplation that such an enterprise would expand and be available to other companies. Interestingly, when this buzz hit the financial and healthcare sectors, stock in major healthcare companies dropped.
    Teaming up to offer healthcare to just their own employees would be substantial, since the three enterprises combined include over a million workers.
  2. There is also some buzz regarding Amazon getting into the retail investment market, essentially competing with other online trading companies such as E-Trade. The prospects for this have to be appealing to Bezos for two reasons.
    – Amazon has one thing that many other investment and financial asset management enterprises do not fully enjoy – trust. In fact, in a 2017 Harris Poll, it came through as the most highly trusted company in the U.S. With this level of trust, consumers may flock to an asset management offering from Amazon.
    – Alibaba, which must be seen as a major global competitor. It now manages the largest money market fund in the world. While the asset management world has watched in shock and awe at the growth of this fund, certainly Bezos’s brain is churning too.

Additional Expansion Initiatives

One thing is for certain. Amazon has plans for expansion of its e-commerce retail business in order to compete globally with Alibaba. Its current target is India, because it has one of the fastest growing middle classes in the world, as well as one of the fastest-growing e-commerce markets. In fact, it is predicted by Wordpay to become the second largest e-commerce market within the next decade, second only to China. At the same time, retail markets in both the U.S. and China will grow at a much slower rate.

Another area into which Amazon is expanding is pop-up stores. Between 2014 – 2016, it opened a number of them in shopping malls in several states. The focus of these stores are Amazon devices, like the Echo and Fire tablets, as well as to promote its Prime membership. But, given the tenuous future for malls, Amazon has also moved into other retail establishments. In November, 2017, it opened pop-up stores in Several Whole Foods Markets, a company it purchased in August of that year.

And there is a growing partnership between Amazon and Kohl’s. Amazon has opened “smart home spaces” inside a dozen Kohl’s stores in California and Illinois. Again, the focus is on Amazon gadgets. And in these stores, customers can also return Amazon purchases, rather than having the inconvenience of shipping them.

What’s Next

Bezos and Vice-President Dave Clark were recently interviewed on CBS 60 Minutes about the future of this giant we call Amazon. Bezos spoke of the latest initiative in shipping – drone delivery. Clark toured the interviewer through one of their fulfillment centers. During that tour, Clark stated that the goal of Amazon is that anyone can get anything in the world through their company.

It seems that, while the loss of several hundred jobs in Seattle is certainly painful for those let go, it certainly is no indication that Amazon is facing any difficulties. In fact, this behemoth just keeps on swallowing up more niches.

About the Author

Dina Indelicato is a blogger enthusiast and freelance writer. She is always open to research about new topics and gain new experiences to share with her readers. Currently she is a writer for Pick Writers. You can find her on Twitter @DinaIndelicato and Facebook.

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