Moving into the holidays, Amazon typically makes a bunch of hires, but these are unprecedented times™. The company has started laying off employees this week.

Cuts have been made to teams involving Amazon’s voice assistant, Alexa, and the New York Times reported that other cuts will come to its retail division, as well as human resources. The move comes as the Everything Store faces slowed growth and increased costs on top of over-hiring over the past few years, analysts told Retail Brew.

“What it needs to do now is tighten its belt to rebalance the equation and start making more money,” Neil Saunders, managing director of GlobalData, told Retail Brew. “And it’s therefore looking for areas where it can cut back—where it can trim without really affecting customer service.”

Amazon’s Q3 revenue grew 15% from $110.8 billion in 2021 to $127.1 billion this year, but that still fell short of analysts’ expected sales of $155.15 billion. During CEO Andy Jassy’s tenure, the company has aggressively cut costs where it can, including shutting down its telehealth service and closing 68 retail storefronts earlier this year.

• As one of the largest companies in the world, Saunders believes the layoffs, for Amazon, aren’t too worrisome from a bigger-picture perspective.
• Amazon did not return Retail Brew’s request for comment.

“Amazon has expanded enormously over the past few years, so this is a relatively small retrenchment,” he said. “But it is a significant one, because we’re used to Amazon expanding ad infinitum, and this is a break of that trend. It’s something very different.”

Keep reading here.—KM

The retail industry isn’t immune to the Big Tech layoffs dominating headlines: Amazon’s expected cuts will target both its retail and devices arms, and Meta’s VR aspirations are on the chopping block. But the apparent retreat from mixed reality doesn’t necessarily mean retail won’t continue to see advancements in those sectors.

The layoffs are likely the result of over-hiring and macroeconomic headwinds, rather than go-to-market flaws with the technology or intrinsic barriers, Eric Abbruzzese, research director at intelligence firm ABI Research, told Retail Brew via email.

“I don’t imagine planned AR/VR device launches or feature rollouts will be delayed, but instead spending becomes more focused,” Abbruzzese said.

Amazon Fashion’s recent partnership with Snapchat—enabling users to virtually try on glasses from brands like Oakley and Ray Ban—could be an example of just that shift.

“It does solidify some timing and resource allocation for the company,” Abbruzzese said. “Rather than building everything in house, Amazon is partnering; Amazon is one of the few companies who could theoretically build out an entire AR retail branch for a business of their size, but partnering likely was mutually beneficial for Amazon and Snap to quicken their AR retail efforts.”

• Snap is all in on AR, reporting 250 million daily users of its AR capabilities in 2022, and launching initiatives like a multi-year partnership with Live Nation.

Trend setters: Shahd ElAshri, a research analyst at International Data Corporation Canada, told Retail Brew the Snapchat integration indicates Amazon is “starting small,” but that the AR experience market isn’t closely linked to the layoff-heavy world of AR/VR hardware.

Keep reading here.—MA

Today’s top retail reads.

Party like it’s ’07: Uggs has appeared to pull off a Crocs. The brand’s ultra mini platform boots are flying off shelves ahead of winter as models and influencers have boosted demand through the roof. (the Wall Street Journal)

Making it work: The house market isn’t great right now, but Home Depot and Lowe’s aren’t skipping a beat as existing homeowners are still spending on renovations. (CNBC)

What a shopper wants: If you haven’t been paying attention, we’re essentially in the midst of the holiday shopping season given the shift in consumers’ habits. Here’s what shoppers are looking for as they make the rounds this year. (Salesforce)

Learn: Recessions hit hard, but they hit the retail sector harder than most. The Brew can help you build a protection plan with our Business Analytics Accelerator—and learn how data and finance define success.

Holly jolly data: Feeling uncertain about what to expect from consumers right now? Learn how to leverage data analytics to inform strategic business decisions this season—and all year long. Register for the webinar.*

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The numbers you need to know.

Discussion around the holiday shopping season typically centers around the big players, but small to medium-sized businesses have their own set of challenges.

But despite fears of a recession and inflation, 88% of retailers expect to make the same or more this holiday season compared to 2021, according to new data from Fiverr, which surveyed 500 business owners and executives.

• Just over a third (36%) of those surveyed believe inflation will be among their biggest challenges this year.
• But don’t forget about supply-chain management: 43% said supply-chain disruptions and inventory shortages would be a challenge, alongside competition with large e-commerce retailers (37%).

Even though Black Friday is more than a week away, many of these businesses are in the heart of their holiday shopping season. A majority (64%) started holiday promotion planning one to three months earlier this year compared to 2021.

• Almost half (47%) also plan to offer steeper discounts this year, on account of excess inventory and price-conscious consumers.

“The data shows businesses are shifting their strategy, preparing early, and prioritizing marketing channels that will keep them competitive in the current market,” Gali Arnon, CMO of Fiverr, said in a statement.

Catch up on the Retail Brew stories you may have missed.

• Print circulars aren’t dead just yet
• Why Singles Day sales numbers were a secret this year
• Here’s why so many retailers are debuting VC funds