Amazon Layoff Watch

I predicted earlier this year that Wal-mart will buy Amazon in 2006, and I’m standing by that prediction. I now have a nearer-term Amazon prediction: Big layoffs.

Tomorrow night’s first-quarter results at Amazon are going to be disappointing, with costs up and earnings down. Analysts are going to get ever-noisier about the absence of leverage in the Amazon model — costs keep ramping as a fixed-ish percentage of sales, as opposed to flattening and producing prodigious profits — and Amazon will reluctantly come to the conclusion it needs to take some costs out of its model. And those costs are going to come from people — layoffs. Lots of ’em.

Trust me, it all happens at Amazon in 2006.


  1. My wacky prediction for 2006 is that Amazon will acquire or build out its own shipping and distribution network. If they are starting to ship groceries (with Gristedes to compete with FreshDirect) they need that kind of control over the shipping.

  2. From what I hear, Amazon is hiring at a frenzied pace right now. Taking a peek at, I see 494 open positions.
    Even if their costs become more of an issue, do you think they’ll switch directions that rapidly? Go from rapid hiring to massive layoffs? Isn’t a modest slowdown in the pace of hiring more likely?

  3. While that might seem logical, it is often not the case. There have been a number of stories lately about companies that are hiring aggressively on one side, and meanwhile laying off busily on the other.
    There is a good example of that sort of thing in this story.