Major U.S. companies Amazon and Netflix have successively engaged in workforce reductions. Amazon is laying off employees across business units in multiple countries, and reports indicate that Netflix is set to lay off 800 people, or 5% of its total workforce.

Amazon: Additional Layoffs Following Last Year

On the 10th (local time), outlets including the Los Angeles Times and Business Insider reported that Amazon carried out workforce reductions centered around its stores division, which is responsible for operating its online shopping site.

The scale of the layoffs is known to be approaching 1,000 people. Employees handling various tasks such as customer service, engineering, and marketplace support received layoff notices not only in the United States but also in India and the United Kingdom.

Amazon already eliminated 30,000 jobs from late last year to early this year. Since then, the company appears to be continuing efforts to downsize staffing by business division.

Amazon founder Jeff Bezos recently mentioned the excessive hiring during the COVID-19 pandemic as the background for the layoffs in an interview with Fox News. He explained, "(During the COVID-19 pandemic) people stayed home and increased orders, and it was a wonderful yet high-pressure time for us. We achieved numerous results, but as a result, we ended up expanding our workforce too much."

Increased investment in the field of artificial intelligence (AI) is also cited as a factor intertwined with changes in workforce management. Amazon plans to invest 220 billion dollars (approximately 295.6 trillion won) in building data centers and related infrastructure to strengthen its AI business.

Netflix: Outlook for a 5% Workforce Reduction

Projections have also emerged that Netflix will pursue large-scale workforce reductions. Citing sources, the LA Times reported that Netflix plans to lay off 800 employees, accounting for about 5% of its total staff. If the actual layoffs take place, they are expected to be the largest scale since 2022.

While Netflix has increased spending on content, the growth rate of viewing time has fallen short of expectations. Viewing time in the first half of this year increased by a mere 2% compared to the same period last year. Ted Sarandos, co-CEO of Netflix, also recently stated at the Bloomberg ScreenTime event, "We are not growing as fast as we would like."

Restructuring efforts are also continuing in the gaming business. Netflix suspended the operations of game studio Night School in August and is also set to close MoonRogue, a game studio located in Helsinki, Finland.

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