Amazon is closing 10 million retail jobs, including 3,000 in California, as it seeks to eliminate costs and reduce debt in a dramatic shift that could affect the company’s digital business.
The retailer said Wednesday it was eliminating 3,100 jobs and cutting more than 500 jobs in its digital operations, while cutting other positions.
The layoffs are being announced after a quarterly conference call with analysts and investors, in which it laid out its restructuring plan.
The company also said it would close a fulfillment center in Huntington Beach, California, and move more than 2,000 jobs to Mexico, the first such move by a major retailer in the United States.
The move comes a day after Amazon’s stock fell to its lowest level in more than five years, following a series of disappointing earnings reports and a news report that it would be closing its retail stores in China.
The online retailer said it is expected to reduce costs in the coming months and will reduce spending by about $1.2 billion in the fiscal year that ends Sept. 30, or about 6 percent of revenue.
Amazon will spend $7.7 billion in its first fiscal year, the company said.
Amazon said the company will be able to “reorganize the business as it moves into the future,” and will have more flexibility to meet customers’ needs in a “digital, cloud, mobile, and social” environment.
Amazon also said that its retail operations would have “no significant disruption to Amazon’s business as a whole.”
The company said it expects its retail business will continue to be a source of income for the company in the years to come, but it expects the loss to be “minimal.”
The decision comes at a time when the company is facing an antitrust investigation into its use of artificial intelligence in order to help customers find products.
The U.S. Justice Department is also investigating Amazon for possible antitrust violations over its online retailing business, which it is accused of taking advantage of to compete with online retailers such as Amazon.
The investigation is also examining the impact of Amazon’s decision to cut off the sale of a popular service called Prime, which is a service that allows customers to buy a subscription for $99 a year.
The announcement comes as the company faces new scrutiny from Congress about its decision to pay employees to work as independent contractors rather than as full-time employees.
The news comes just days after Amazon agreed to pay $13 million to settle a lawsuit by the Federal Trade Commission, alleging the retailer did not pay enough of its employees a fair wage.
The FTC said that the settlement “will help Amazon address the company�s ongoing wage issues, as well as address other issues that could impact its bottom line, including wage theft, labor law violations and labor relations issues.”
Amazon said that it will pay employees $1 an hour, plus tips.
The New York Times reported that Amazon was paying employees $12.25 an hour.
Amazon is also facing criticism over its plans to sell a new product in the U.K., called Echo Dot, that uses artificial intelligence.
The new product is called Alexa, which Amazon said will help people “interact with technology, voice, and physical devices in a way that makes them feel as though they are in the real world.”
Amazon has said that Alexa is not designed to be an Amazon-like service, and the product is not yet available.
Amazon, however, said the Echo Dot will be available in time for Thanksgiving this year, and is expected by the end of 2019.
Amazon CEO Jeff Bezos told reporters Wednesday that he believes the new product will be ready for launch by the holiday season, according to the Times.
“I believe the Echo is going to be on store shelves as soon as Thanksgiving,” Bezos said.
“We�ve been working with Amazon for months on this, and it�s going to work very well.
I�ve got no reason to believe that the Echo won�t be on shelves.”