Amazon laid off 100,000 employees in 3 months? Frontline warehouses are already overcrowded

In Amazon’s Q2 financial report released last week, there was a shocking statistic that shocked me. At the end of Q2, Amazon had 100,000 fewer front-line employees compared to Q1!

I didn't add an extra zero. There are indeed 100,000 fewer people in three months, with more than 1,100 people leaving every day. According to the average number of employees in Amazon's FBA warehouses, one warehouse is basically emptied every two or three days. And this number is after deducting the new employees hired in Q2, which is three times more than the annual employee turnover in 2021. Even if these 100,000 people are paid $2,000 per month, Amazon's front-line operating costs are reduced by 200 million. No wonder the Q2 financial report is much better than the first quarter, and layoffs have contributed to cost savings.

However, whether layoffs will affect FBA sales is what sellers are most concerned about. According to official statements, the warehouse is currently overcrowded with frontline employees. There are so many people that it affects warehouse sales. Three people doing the work of two people is a hindrance and inefficient. Therefore, the reduction of 100,000 people will make the existing warehouses lighter and the goods flow faster. At least that's what the official statement says.

Even after laying off 100,000 people, Amazon still has the largest number of employees among American technology companies, with a total number of about 1.55 million employees. The layoffs of 100,000 people this time is only a fluctuation of 6%, which can be held. Especially now that the peak season is over, there is not much demand for front-line processing staff, and many sellers do not need to worry about the impact of layoffs on FBA warehouse capacity.

In fact, layoffs are a good thing for sellers.

We have previously speculated that due to rising costs at Amazon, Andy, who had just taken office for his first year, had to find more profit points to save his own skin. Therefore, in Q1 and Q2, there were many operations to deduct more profits from sellers, such as the 5% fuel surcharge imposed at the end of April and the extremely high advertising bidding during the just-passed Prime Day.

These places that Andy found did bring more growth to Amazon in Q2. The revenue from third-party seller services (including the above-mentioned fuel surcharges, commissions, etc.) maintained a growth rate of about 9%, which was much better than the 4% decline in Amazon's own business. In Q2, the revenue from in-site advertising increased by 18% to 8.76 billion US dollars, making it a giant in Internet advertising. These two are important profit points in the Q2 financial report. With Amazon's large-scale layoffs, the company's profitability has finally recovered.

In this situation, Amazon will definitely continue to optimize its personnel and stabilize the sellers. There will be two Prime events in the third quarter, which will definitely look good in the financial report. Therefore, finding profit points from sellers will not be the focus in the future. Sellers can prepare for the autumn Prime and Black Friday Cyber ​​Monday in the second half of the year.