A tech company now announces unexpected layoffs worldwide to its global customer service organization, impacting under 1% of staff.
The workforce reduction aims to shrink the distance between consumers and customer service leaders, and increase focus on team growth and development, Amazon said.
“As part of a shift in how our Worldwide Customer Service organization is structured, we’ve identified a relatively small number of roles that are no longer required,” Amazon Spokesperson Montana MacLachlan said in a statement.
“We did not make these decisions lightly, and we are committed to supporting employees whose roles are affected during their transition.”
The role of the call center agent is changing as customer habits evolve and technology advances.
Rising interest in digital self-service prompted L.L. Bean to cut its call center hours starting in July, though a large majority of its 500 call center staff will remain unaffected.
Earlier this year, American Airlines said it would lay off 656 customer support workers as it streamlines the inquiry handling process.
Generative AI is having an impact on operational strategies as well.
The technology can help customer service teams manage stress and burnout by powering self-service options for simple inquiries, leaving agents to handle fewer, but more complex, calls.
Amazon global customer service cuts arrive as its cloud arm is injecting intelligence into its contact center technology.
One AWS tool, Q, is a chatbot that recommends actions to help agents answer customer questions in real-time.
“Gen AI is and will continue to be an area of pervasive focus and investment across Amazon, primarily because there are few initiatives, if any, that give us the chance to reinvent so many of our customer experiences and processes,” CEO Andy Jassy said during a Q1 2024 earnings call in February.
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Other Economy News Today
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
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