A perfect storm
The full reopening of brick-and-mortar stores and food services after the COVID-19 pandemic contributed to a milder growth in e-commerce revenue. In the United States, the e-commerce share of total retail sales has slightly decreased since the first quarter of 2021 and a similar trend has been observed in the United Kingdom. As a result, a significant share of workers initially hired to cope with the unprecedented e-commerce growth has thus been dismissed.Online retail giants seemed to follow the more general downturn trend of software and tech businesses headquartered in Europe and North America. In the last three months of 2022, the e-commerce behemoth Amazon downsized its headcount, despite this being the most hectic season of the year due to sale events and holiday shopping. By the end of 2023, Amazon's layoff count will total at 18,000. Its competitor eBay also cut thousands of jobs due to its stagnating retail business activity registered over the last two years.
No player is spared
Besides big marketplaces, online food delivery startups that emerged during the last two-year two year boom are already scaling back their activities, as increased fuel prices and lower consumer demand take a toll on their profits. This is the case of the U.S. company GoPuff which let go 2,300 employees only between January and October 2022.As it happened in physical retail, shrinking sales forced other non-food online retailers to reduce operating expenses and personnel costs. At the beginning of 2023, furniture online retailer Wayfair laid off nearly ten percent of its workforce in response to their latest revenue decline. In the United Kingdom, workforce reduction of several online fashion and homeware brands coincided with falling share prices, with made.com registering the sharpest drop. However, keeping e-commerce activities profitable appeared to be more difficult for pure players than for traditional retailers, according to the results of a 2022 survey.