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Spokane, Washington  Est. May 19, 1883

Amazon freezes corporate hiring in its retail business

The Amazon Spheres are shown at the e-commerce giant’s headquarters in Seattle on Dec. 3, 2019.  (New York Times)
By Karen Weise New York Times

Amazon is freezing corporate hiring in its retail business for the rest of the year, according to an internal announcement obtained by the New York Times, making it the latest company to pull back amid the economic uncertainty.

The announcement, in an email to recruiters, said the company was halting global hiring for all corporate roles, including technology positions, in its stores business, which covers Amazon’s physical and online retail business and its logistics operations. More than 10,000 openings were posted in that division, which accounts for the bulk of Amazon’s sales, as of Monday evening.

The broad freeze won’t affect the company’s more profitable cloud computing division. Some roles, such as student hiring and field positions, were exempt from the pause, the email said.

“Amazon continues to have a significant number of open roles available across the company,” Brad Glasser, an Amazon spokesperson, said in a statement. He said some parts of the business were more mature than others, “and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures.”

The freeze at the nation’s second-largest private employer is part of a wider cooling in the job market, or at least another sign that it is no longer at a raging boil.

On Tuesday, the Labor Department released data showing that while many parts of the job market remained strong, employers were slowing the number of roles they were looking to fill. About 10.1 million positions were open in August, down from 11.2 million in July. Federal Reserve officials have hoped that rising interest rates could lower inflation by reducing hiring – and with it the pressure on wages – without requiring widespread layoffs.

After a frenzied era of hiring bonuses, raises and shortages, employers are finding it somewhat less competitive to attract and retain workers. Layoffs rose slightly to 1.5 million in August, the new Labor Department data reported, but they remained below their historical average.

Layoffs and hiring slowdowns have hit a wide swath of the tech industry in recent months. That includes startups as well as publicly traded companies like Peloton and Shopify, which announced in late July that it would lay off 10% of its workforce after incorrectly predicting how much e-commerce would boom as the pandemic receded.

Large companies have not been immune, either. Meta, the parent company of Facebook, told employees last week that it was freezing hiring for most positions.

For retailers, the economy is shifting at a critical time as they march toward the all-important holiday shopping season. Many, including Amazon, are hoping to get the season started early as customers hunt for deals and have announced October sales days. Amazon’s new Prime Early Access Sale is next week.

Many have signaled a painful period ahead, with rising costs and inventory as consumers cut back on discretionary spending amid high inflation.

Walmart, the country’s largest private employer, has said it will hire fewer hourly workers for the holiday shopping season this year. FedEx, which competes with Amazon for delivering packages to customers, said last month that it was freezing hiring, closing stores and parking planes as demand fell short of its forecasts.

Amazon told recruiters to tell job candidates that it was not in a hiring freeze, although it went on to say all open job requisitions should be closed in the coming days. It said new openings will be available early next year.

Candidates with interviews scheduled before Oct. 15 could still receive offers, but they would not start at Amazon until next year. The email recommended that phone calls to screen candidates and other early recruiting activities should be canceled.

Amazon’s listings show it is still hiring warehouse workers, whom it regularly needs because of high turnover. It recently said it was raising wages at its warehouses by an average of about $1 per hour and has not yet announced whether it will hire seasonal associates for the holiday peak season.

Under Andy Jassy, who took over as CEO a little over a year ago, Amazon has been pulling back on spending as it looks to trim costs amid its weakest growth in two decades.

Jassy recently told investors that the company had focused on controlling costs and efficiency in its warehouse and logistics operations. Amazon’s footprint grew fast in recent years, and during the pandemic the company went on a hiring spree unrivaled in the history of corporate America. This year it has slowed its once-rapid warehouse expansion, closing facilities, backing out of leases and mothballing some new buildings.

The company employed 1.52 million people in the second quarter, almost 100,000 fewer than at the end of March, primarily because of reductions in its hourly workforce.

The corporate hiring freeze is the latest sign that cost-controlling measures are hitting Amazon’s core retail and technology teams as well. After announcing plans to acquire One Medical, a chain of primary care clinics, it shuttered its own primary care business, telling officials in Washington state, where Amazon is based, that the move could result in 159 layoffs.

In recent years, Amazon hosted a Career Day in September, during which it recruited for tens of thousands of salaried positions. Last year, it received more than 1 million job applications. But it did not host the event this year.