This is an audio transcript of the FT News Briefing podcast episode: ‘Amazon set for big job cuts’

Sonja Hutson
Good morning from the Financial Times. Today is Tuesday, November 15th, and this is your FT News Briefing.

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There’s more pain in store for big tech workers. This time, the cuts are at Amazon. Google agreed to pay its biggest privacy fine ever. Plus, investors in China’s troubled property industry finally found something to get excited about. I’m Sonja Hutson, in for Marc Filippino, and here’s the news you need to start your day.

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UK couriers have warned customers to prepare for late deliveries during the Black Friday sales next week and the lead up to Christmas. In this key time for shopping, retailers are bracing for strikes by postal workers at the UK’s biggest courier, Royal Mail. The company is battling with workers over its plans to modernise as competition increases. Royal Mail rivals have grown by employing staff on lower salaries and more flexible contracts.

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Amazon plans to cut around 10,000 jobs. The giant retail and internet company is grappling with soaring costs and stuttering growth. It’s the latest in a series of big tech layoffs. I’m joined now by the FT’s Richard Waters to talk more about this. Hi, Richard.

Richard Waters
Hi. Good to talk to you.

Sonja Hutson
Is Amazon laying off these workers for the same reason that other companies like Meta are reducing their workforce? Or is there something else going on here?

Richard Waters
I think the way we should look at this right now is that these biggest tech companies have run headlong this year into a slowing economy. And it’s really quite remarkable how fast they’ve been expanding, even as all the you know, the warning lights have been flashing that things are slowing down. And this came even as their growth rates this year really hit a wall. You know, during the pandemic, they were growing tremendously fast. And we all had this idea that digital activity was taking over and we were all gonna be buying things online and, you know, watching Netflix and doing things. Our lives were gonna change. And so these companies grew very fast. Well, that expansion continued right through this year, and now they’ve hit a wall. And so suddenly, you know, these and they’re still very successful businesses. They’re suddenly taking an axe to the, you know, to what is probably their first company wide reductions they’ve ever seen in this way. So it really is a moment, I think, for big tech and for Amazon.

Sonja Hutson
So Richard, what departments and divisions are being hit hardest by these layoffs? Or is this more across the board?

Richard Waters
So what makes this particularly interesting, I think, is that this 10,000 job cut affects the corporate workers, you know, the people who work on technology, the people in marketing. In other words, you know, what you might think of as the tech company inside Amazon say they cut out all the frontline workers, this is the rest. So they’ve got more than 300,000 people in those jobs. So this is still only 3 per cent of, you know, those kinds of workers. So it doesn’t sound like a huge percentage, but it is still 10,000 jobs. It is very unusual, as I say, being in a company wide at that level and coming after this tremendous period of expansion. And so it really shows that, you know, these companies are saying, hang on a minute, look at the fat we put on. We’re no longer, you know, these trees are not gonna grow to the sky. We’re no longer gonna grow endlessly. And so it’s time to start shaping up.

Sonja Hutson
I want to turn to some news about another tech giant, Google. Yesterday, Google agreed to pay its biggest privacy fine ever, nearly $400mn. It’s a settlement with 40 US states over how Google collected user location data. What was the lawsuit about and how big of a deal is this?

Richard Waters
So Google has relied on location data for targeting its mobile advertising. Now, what the states have been investigating and discovered is that many users of Google who thought they had turned off the collection of their location data, many of Google’s apps, its maps function and on similar things, were still collecting location data. This was obviously confusing and according to the states was misleading and was a deliberate attempt to mislead people. And so Google now says it’s corrected this, by the way, it says it no longer does this, but it was obviously for many years a very significant way for them to collect location data. And so I think the scale of that is reflected in the size of the fine.

Sonja Hutson
And how significant is that fine to such a huge company like Google?

Richard Waters
The fact that they’re paying $392mn, to them to Google, that’s not a huge amount of money. But I think we need to keep this in perspective. It’s facing additional complaints from other states on this. So the total bill on this one thing is probably gonna go well above $500mn. And it was only a few years ago that privacy regulators were fining these companies ten or $20mn. So I think the fact that we’re now looking at half billion dollar penalties gives you a sense of just how significant these things have become.

Sonja Hutson
Richard Waters is our west coast editor. Thanks, Richard.

Richard Waters
Great pleasure.

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Sonja Hutson
Chinese real estate stocks and bonds jumped in value on Monday. This was after news that the government was about to come out with a plan to support the country’s struggling property sector. Here’s the FT’s China correspondent, Ed White.

Edward White
So we had a document available on the FT on Sunday, which was basically the details of the 16-point plan from China’s central bank and the top banking regulator. And this was a set of measures designed to ease pressure on this debt ridden property sector, which has been under a huge amount of liquidity crunch over the last couple of years. Now, the key change here was a deadline was being extended for lenders, so the country’s major banks, to cap the ratio of property sector loans. And so this was basically allowing banks to have more time to continue lending to the property sector. And that was basically something that was going to mean that the entire city would have a major amount of pressure just taken off it. So easing that pressure on the sector, which has been fighting to survive under a really historic downturn.

Sonja Hutson
Ed, I want to back up and remind people that China’s property industry has just been melting down. Companies were overloaded with debt. They couldn’t pay back their loans. Developers weren’t finishing projects, among other problems. What else was worrying Beijing?

Edward White
So for a bit of context here, there had been signs of rising social instability after hundreds of thousands of people over the past year have been boycotting their mortgages. And this meltdown had spread just from not just the developers and developing defaults, but also slumping apartment sales. And it was flowing through to local governments and also risking contagion across the financial sector.

Sonja Hutson
So what was it about Beijing’s announcement that made investors more optimistic?

Edward White
Markets really like the idea that Beijing is taking the pressure off the sector. Whether or not that flows through to structural change, I think is yet to be seen and would seem to be something that would be needing a lot more confidence building into the market. So basically, people have been looking for things that are gonna support both the private sector developers and then also support confidence in the market so that people are gonna start repaying their mortgages and buying more property. Whether or not that happens I think is yet to be seen. But at least in the short term, these measures are seen as being a real clear signal that Beijing is actually taking pressure off the sector and that perhaps they’re gonna have a slightly more tuned in focus on economic growth rather than just worrying about so much debt and the property sector.

Sonja Hutson
Ed White is the FT’s China correspondent. Thanks, Ed.

Edward White
OK, thank you.

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Sonja Hutson
Before we go, oat milk has become one of the fastest growing plant-based milks in the US. But perhaps the most famous brand seems to be losing its froth.

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Sonja Hutson
Swedish company Oatly became famous for its ad starring the company’s CEO. But the company’s ambitions to build and operate its own factories has run into repeated delays, so it wasn’t able to meet demand. Rival brands like Planet Oat and Chobani stepped in to eat up Oatly’s market share. Yesterday, the company slashed annual revenue forecasts and announced job cuts.

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You can read more on all these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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