It’s a cost-minimization strategy. I’m sure one of the 300+ economists at AMZN had to write a 6-pager on this question. Layoffs are labor level reductions amid

It’s a cost-minimization strategy. I’m sure one of the 300+ economists at AMZN had to write a 6-pager on this question. Layoffs are labor level reductions amid ongoing or expected periods of excess labor capacity. It’s almost a classic supply chain/operations management problem. Classically an Amazon core competence and problem at Amazon [1]. There are both shortage and excess costs to labor levels (ie. labor inventory) vs labor demand, combined consider as a supply-demand mismatch cost. To minimize this cost is to create a perfectly coordinated supply chain/inventory system through minimizing shortages and excesses. Statistically speaking, it is incredibly difficult for a company to perfectly return to that optimal level of supply in 1 single action because the optimal level is difficult to measure in the short run. Therefore, by monitoring supply and demand of labor over time, you are able to make more precise adjustments to return to optimal level of labor. Sadly, this strategy implies Amazon likely used a lower percentile estimate of required labor reductions for initial layoffs, meaning the mean/median estimate of required labor reductions is likely higher than already announced. [1] https://www.vox.com/recode/23170900/leaked-amazon-memo-warehouses-hiring-shortage https://www.vox.com/recode/23170900/leaked-amazon-memo-wareh...