With the retail giant axing 18,000 staff this month, Kevin Poulter, Employment Partner at Freeths, explains how employers should handle such a big redundancy process
It is important to know the law when it comes to making large-scale job cuts
Sadly, at some point in the lifecycle of a business, it is inevitable that such a decision will have to be made and delivered to employees.
For both the company and its employees, how that decision is reached and how the message is communicated can make a huge difference – commercially and legally.
The news that e-commerce giant Amazon is making 18,000 job cuts across its workforce may be surprising because it is one of the biggest success stories of this generation.
A reduction in staff may be perceived as a further loss of confidence in the tech sector, coming on the back of significant job cuts at Meta, HP, Asos, Salesforce and Twitter.
Amazon’s own explanation is that the reduction in staff – largely from its bricks-and-mortar division – is blamed on its competitive recruitment drive over the past few years and the ‘uncertain economy’ which faces businesses right now.
There are many reasons why redundancies will be considered by a company.
For example, reducing overheads, restructuring or ‘right-sizing’, a change in business direction, or the closure of a particular service, location or the company as a whole.
Many redundancies are made each day without public interest or scrutiny.
But where large numbers are being considered, employers should also consider the wider messaging beyond its workforce.
Redundancies must follow a fair procedure.
This will usually involve informing employees of the proposed redundancies, consulting with them and following a fair selection process (if necessary).
Then, serving formal notice and making any minimum payments which may be required.
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