Amidst slowing sales and increasing expenses, American e-commerce giant, Amazon.com Inc has decided to pause the creation of new staff positions in its advertising business.
The advertisement segment of the e-commerce firm is one of the most profitable and significant revenue streams of the company. The company’s decision to freeze staffing levels in that segment suggests the ongoing financial crisis in the multinational conglomerate.
The advertisement segment of Amazon.com Inc generated $9.55 billion in the September quarter of the current financial year. It was a 25 percent increase when compared to the same period in the previous financial year.
A person who has knowledge about the recent staffing freeze told news agencies that the headcount freeze was internally announced on Tuesday. The person also said that Amazon Inc will continue to fill up vacant positions in the advertisement businesses in order to increase efficiency.
The decision to freeze the creation of new positions is part of the company’s efforts to bring down expenses to match the slowing sales volume. Amazon has been facing a severe crisis in its online retail segment for the past few months as consumers have decreased spending on online retail markets.
As the central banks across the globe hiked interest rates in order to control high inflation in the economy, cash flow in the domestic economies was reduced. The continuing economic crisis around the world has forced consumers to rethink purchasing priorities.
There were also reports that Amazon Web Services owned by Amazon Inc is also facing a financial crisis this quarter. Amazon Web Services is the IT service management segment of the e-commerce firm.
A spokesperson of the company said in a statement that Amazon continues to have a significant number of open roles available across the company. “We have many different businesses at various stages of evolution, and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures.”, the spokesperson said.
Amazon is reportedly planning to generate as much profit as possible during the current holiday quarter. The company expects the high number of holidays to push sales volume upwards in its online retail segment. That will help the company to get back some of the lost sales and recuperate the business.
In a piece of related news, stocks of Amazon. Inc listed on NASDAQ again tumbled on Tuesday by 4.67 dollars (-4.82%). The value of the share is currently standing at 92.12 dollars per share.