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| Washington Post |
Summary: Amazon is laying off hundreds of employees working in its Seattle headquarters as well as other locations. The layoffs are happening in Amazon’s “more mature areas of business” such as online retail, in order to open up jobs in rapidly growing sectors such as “echo devices, Amazon’s Web Services cloud business, and digital entertainment and video.” The source claims that the company will try and find jobs in these areas for some of their laid off employees. Furthermore, the company is trying to open up a second headquarters in North America, which is expected to bring about 50,000 more full-time jobs.
Analysis/Connection to Economics: I feel like this incident fits well into the Worldly Philosophers Chapter 3 reading which described how in a market system, society’s demands for quantities are met. If people want more of Amazon’s echo and its digital entertainment and video, Amazon is going to spend more of its scarce resources to fit those demands rather than continue pursuits such as online retail which are now not as desired. Unfortunately, this change in resource allocation will lead to the laying off of a lot of employees, however, considering that Amazon is continuing to expand its workforce, I think that these employees will have other job options.
Questions:
1. Are you concerned about the layoffs?
2. Is preserving existing jobs more important, or creating jobs in more profitable areas at the expense of laying off employees?
3. Do you see any other connections to what we have learned in economics?
Links: CNN ; Washington Post
15 comments:
1. Are you concerned about the layoffs?
-I am not concerned about the layoffs. Amazon made a financially good move for their business to cater to the aspect of their company that is significantly profiting. It is tough to lay that many people off, but for the sake of the future of the company,measures such as these must be taken in order to ensure effectiveness.
2. Is preserving existing jobs more important, or creating jobs in more profitable areas at the expense of laying off employees?
-Depends from which sandpoint. It is easy to say from a buisness standpint that this is the most economically smmart move and it will greatly save the company some money. However, from the worker point of vieew it is a lifeline of a job and the layoff could put may families in trouble.
3. Do you see any other connections to what we have learned in economics?
-i do not see any other connection besides a solid tradeoff. the company gave up one thing to obtain another.
I'm not really concerned about the layoffs because like Josh said, Amazon knows what they're doing. I think that creating jobs in more profitable areas is more important to stimulate the economy and increase production. Even though it might hurt some workers, what's the point in keeping an employee when they aren't needed there? It just depletes the company. This is obviously a tradeoff as someone employees are given up to gain more. This also has something to do with opportunity costs as there is an opportunity cost of laying off the employees, such as the employees' work or contributions.
I agree with both Emily and Joshua in connecting this to simply being a tradeoff. In our text, Mankiw constantly refers to trade offs as an important aspect of the market and economy. I also think that honestly, laying off workers is a part of the business. Perhaps this layoff will result in higher profits for the company, or allow them to hire more people in the new branch they are opening. Either way, I would assume that they considered these trade offs when making the decision to lay people off at their headquarters.
I agree with the comments above in that the layoffs, while disconcerting to the workers, seem to be part of the natural cycle of business. Especially with large corporations like Amazon, businesses face necessary redistribution of existing jobs from fields of little demand to fields of increasing demand. Like Elena said, this is a tradeoff.
Unfortunately, employees are most affected by the natural cycle of job cuts. Like Josh said, employees may, and probably do, depend on their job to pay for themselves or their families. Layoffs are especially concerning if they're unexpected and excessive. Families or individuals won't have time to prepare for sudden unemployment, which is a huge cost for them. For businesses, however, layoffs seem to be a last effective resort to save a dying company.
I agree with you that these layoffs don't really seem that concerning. I feel like Amazon has clearly shown that they are taking steps to expanding their workforce and these workers will likely find jobs in the new departments/headquarters. I agree with everyone that this is a tradeoff because they are laying off employees to expand jobs in more profitable areas. I also think that this is "thinking at the margin." In this case, the marginal cost is losing employees while the benefit is more profit and expansion of the workforce. Again, Amazon seems to believe that the profit outweighs that cost, and I think that they are right.
I am not concerned about the layoffs because Amazon is no longer a retail website and the allocation of resources elsewhere would be more profitable to both the employees and the company. While Amazon did start out as a retail website, it has grown to encompass e-readers, artificial intelligence, and movies/entertainment as well. These fields are growing quickly and will require more employees on both the technical and creative ends. Training laid off employees in these new disciplines would benefit the company in the long run, however it would be costly to the company initially to train the employees in new skills. By doing a cost benefit analysis, the company has more to gain from laying off employees.
The layoffs may be an issue now, but it seems that in the long run the company will provide more jobs with the expansions. If Amazon is providing more job opportunities to the people being laid off, it may be more like a transfer than being fired to them. The more distressing part of Amazon’s employment techniques is an investment in robotics and automated delivery, as this can completely remove the jobs of warehouse workers and deliverymen.
Restructuring is a part of every company. Amazon has taken the approach of re-stalking in and building towards the future. This is definitely not a problem for a big company such as Amazon because they are the top of the field and the layoffs will not affect the company at a macro level.
To some extent the layoffs may seem to be a concern, but if other jobs are going to be created in the future to compensate for the layoffs, then I'm not too worried. Also since there is a lot more online retail stores coming out, I think there will be more jobs being created for those online resources. So in that sense, those that have been laid off will still have an opportunity to find jobs in that field.
While the laying off of so many employees must have been devastating to each individual, if Amazon is hiring others in different sectors than there is a sort of neutrality reached. I believe I read before that keeping an employee is much cheaper than hiring new ones, so for the company it would make sense to stop laying off their employees. However, if the man power is needed in positions that the current employees are not qualified to fulfill, then hiring new employees seems sensible. I see a clear connection to the "trade-off" principle we learned about. While having to fire some employees, Amazon was able to hire more.
I agree with Ethan on the fact that these layoffs will be a temporary problem, but the expansion of the company and therefore jobs will be very beneficial in the long run. I think that this is a good sacrifice being made by Amazon. People that get laid off will hopefully be able to get one of the new job opportunities later on created by Amazon. I also believe that we should prioritize creating new jobs in more profitable areas at the expense of laying off employees. Although this is a tough trade off, I think it will definitely benefit everyone in the long run. By creating more jobs, Amazon and other companies are able to help the economy.
I think that the layoffs are necessary in keeping the business moving, as if an employee is no longer needed, then why keep them there. I agree that the layoffs are a temporary problem because Amazon is making an effort to find those who were laid off new jobs. With the new Amazon headquarters, it will also open up new jobs for these people. Of course, it is devastating to be laid off regardless, as their heads are probably spinning, wondering what to do now with no job. However, it is only a temporary distress, as it is more important to focus on creating more jobs in more profitable areas in order to ultimately help the economy. This is the trade off principle we learned in class, as we can create more profitable jobs at the expense of laying off some employees.
I believe that these lay-offs are only negative to those that now do not have a job, but is beneficial to the society as a whole. This does not seem like a big deal at all to me. Companies will never have their workers best interest at hand. They will always trie to decrease their costs and maximize their profits in every way. Amazon is just thinking about the future of their company and the branches that are getting laid off are ones that will not make as much profit in the future.
I am not concerned because even though Amazon layed off a few hundred people, it brought prosperity to millions of Americans. We should be grateful that Amazon exists today. For they have all the cheapest items one can find. These lay-offs might be temporary because Amazon has been going through some huge internal infrastructure changes.
In my opinion, I think that this is the harsh reality of business. Businesses will make decisions based off what makes money and what keeps them relevant to the public. Lay offs are necessary to the growth and expansion of the company, especially to try to grow in areas that have higher potential for profit. Echo device is an example of how the technology industry is growing and it's in Amazon's best interest to focus on that area while moving away from older areas that are dying out.
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