Cal State Fullerton College of Business and Economics Management Professor Shaun Pichler was recently featured in a Business Insider article discussing the recent decision by online retail giant Amazon.com to freeze its hiring budget. Pichler noted the decision is consistent with broader slowdown trends in the technology field, impacting companies such as Microsoft, Google, X and Meta.

“Reasons for this slowdown include economic uncertainty, reduced demand and a shift toward artificial intelligence that has changed business priorities toward research and development and machine learning, while automating work roles such as customer service chatbots,” says Pichler. So far, the tech industry has cut 75,000 jobs in 2025. And the layoffs aren’t only in Seattle and Silicon Valley, but across the nation and world.

Pichler told Business Insider that managing headcount (known as operating expense or OpEx targets) as opposed to a hiring budget gives managers more staffing flexibility and leaner teams. “OpEx reduces risk for managers because they have the operating budget they need but aren’t required to have the same number of employees that would have been otherwise,” says Pichler. “From the manager’s perspective, this is useful not only to help reduce costs, but also for flexibility. Managers have more degrees of freedom when it comes to how they source labor. It is more common that temporary workers or contractors will be hired, for instance, which can be less expensive and lower risk for managers vs. more traditional full-time workers.”

Think the hiring freeze means Amazon is losing its luster as the world’s e-commerce king? Pichler says Amazon’s third-party marketplace where multiple independent sellers use the platform to facilitate transactions with customers mean Amazon profits from fees and advertising without having to hold inventory. And this means Amazon’s dominance is unlikely to fade anytime soon.

Amazon is also staying ahead of the curve with new models all the time. “One of the more interesting and recent versions of this are luxury retailers, such as Saks Fifth Avenue, selling directly to customers on Amazon’s platform. This allows Saks to reach more customers than it would otherwise, and it allows Amazon to offer more diversified products, which only enhances revenue from fees and advertising but also has the potential to increase Amazon’s customer reach and overall image,” says Pichler.

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