What do the Amazon layoffs mean for DC tech?

Twitter. Amazon. Throw in Microsoft and Meta and you have a nearly full bingo card of Big Tech and social media company layoffs that have left thousands of tech workers with “Open to Work” on their LinkedIn pages.

Last week, it was revealed that one of those companies — Amazon — would be laying off 10,000 employees, or about 3% of its corporate workforce. In the DC area, the company has about 5,000 employees, is building its second headquarters and has established its East Coast hub for Amazon Web Services (AWS) in Northern Virginia.

Alongside the layoffs, Voicebot reported that the company will also be shuttering Alexa Ambient and likely Alexa Health and Wellness, as well. Layoffs were reported at Alexa Games, Alexa Communications, the Luna gaming service, Alexa Auto, Alexa Skills Kit, Alexa Speech, Alexa Guard, Alexa Proactive Experiences, Alexa Routines, Alexa Video, Alexa Marketing and Device Design Group.

At present, it’s a little unclear what the latest development means for the DMV. Amazon did not respond to questions on how many employees were affected locally, how this will impact plans for HQ2 and whether or not it will rehire those laid off at a later date. But at the very least, for local tech workers who were laid off in this round or another industry layoff, the job market looks a little relandscaped.

Martine DeVoe worked as a human resources business partner for Amazon in 2020 and 2021 before leaving to take a role at Snapchat, where she was laid off in September. While the Gaithersburg, Maryland resident has a few different theories about the mass layoff, largely she thinks that the company is “right-siding” itself following huge demand from 2020 and a subsequent drop-off.

Still, it’s news that is at least highly unusual, if not unsettling for regional tech workers, as Amazon has always been a stable place for these employees.

“Amazon was always one of the only places that was hiring. People knew, ‘Oh, I can always go to Amazon and get a job, Amazon’s always hiring,'” DeVoe told Technical.ly. “Amazon has never done a massive layoff like what they’re doing now.”

Sources including DeVoe have reported that Amazon is also sending out volunteer release programs that include severance payments. But she said that staffers didn’t get a warning notice ahead of time, with many only finding out through reports from news outlets.

There was a singular warning shot, though, albeit a small one. Earlier this month, Amazon released a statement saying that it was pausing hiring in the corporate workforce (something it said it had already done in a few of its businesses). That pause, the statement from Senior Vice President of People Experience and Technology Beth Galetti said, is expected to continue for the next few months.

“We’re facing an unusual macro-economic environment, and want to balance our hiring and investments with being thoughtful about this economy,” Galetti wrote.

What comes next?

Going into the end of the year and 2023, many predict the layoffs aren’t done. Robin Gaster, the CEO of Incumetrics and a visiting scholar at George Washington University’s Institute of Public Policy, expects them to particularly hit the retail and device sides, as well as ventures like Alexa.

Amazon, he said “desperately needed to cull non-performing segments to clean up localized red ink,” and needed to become more profitable outside of AWS. Still, the author of “Behemoth, Amazon Rising” thinks the recent tech layoffs are more of a result of specific mistakes than an overall market upset.

“This is actually more Amazon-centric than it seems,” Gaster said. “And it could be argued that many of the big layoffs result from specific company issues rather than a general downturn, although it’s pretty clear that the massive hiring spree based on endless growth is over.”

DeVoe agrees and is even optimistic that it might be a good turn for some people. Times like these, she pointed out, often lead to entrepreneurship; Someone that had been considering starting their own software company might finally have the opportunity.

But for those not trying to become founders, she nevertheless thinks there’s potential in the tech industry. With local Amazon operations, in particular, there are still some HQ2 expectations to consider. By 2030, the company has pledged to hire at least 25,000 employees and will receive $550 million in government incentives if they achieve it. The tech giant can get an additional $200 million from the state if it hires 37,850 people by 2035. In other words, there’s plenty of room for growth in the long term.

“The market is going to turn around at some point,” DeVoe said. “It’s probably going to get worse before it gets better. But I definitely think tech is still the place to be.”