While Amazon described the move as part of routine restructuring, the consequences could be severe for non-EU workers. (Photo Credit: X)

When Amazon announced plans earlier this week to cut 14,000 jobs globally, a significant share of the impact fell on its technology operations in Luxembourg, a move that could put Indian and other foreign employees in a particularly difficult position.

According to a Bloomberg report, the e-commerce giant is cutting about 8.5% of its workforce in the tiny European nation, or roughly 370 employees out of a total headcount of 4,370. This marks Amazon’s largest round of layoffs in Luxembourg in nearly two decades.

While the company described the move as part of routine restructuring, the consequences could be severe for non-EU workers. Luxembourg hosts Amazon employees from countries including India, the US, Australia, Egypt and Tunisia. Under local immigration rules, foreign workers who lose their jobs typically have three months to find new employment or leave the country.

“These are adjustments that reflect business needs and local strategies,” Amazon said in a memo to staff dated December 12, adding that the severance package “goes well beyond industry benchmarks”. The Luxembourg labour ministry did not respond to Bloomberg‘s request for comment.

Prash Chandrasekhar, a member of Amazon’s employee delegation in Luxembourg, told Bloomberg that some employees are almost certain to be forced to leave the country. “I am almost sure some employees will have to leave. It’s not easy to find a job in Luxembourg, for 370 people entering the job market at the same time,” he said. Chandrasekhar added that for professionals seeking roles in big technology firms, there are limited alternatives outside Amazon in the country.

Under European Union rules, companies must consult employee representatives, and in some cases the government, before carrying out mass layoffs. Following two weeks of negotiations, Amazon reportedly reduced the number of planned job cuts in Luxembourg from 470 to 370. A portion of affected employees are expected to receive formal termination notices in February, Chandrasekhar told the agency.

Beyond the immediate human impact, the layoffs may also create friction in Amazon’s long-standing relationship with Luxembourg, which has positioned itself as a tax-friendly hub for multinational companies. With a population of about 6,80,000, the country has benefited from hosting Amazon’s European operations since 2003, and the company remains its fifth-largest employer even after the cuts.

An Amazon employee, speaking anonymously to Bloomberg, said most of the job losses are expected among software developers as the company expands its use of artificial intelligence and trims roles created during the pandemic-era hiring boom.

Trade unions, including the General Luxembourg Workers’ Organization (OGBL), have accused the government of granting Amazon and other multinationals “outsized” tax benefits. Bloomberg reported that Amazon and several foreign firms operate holding structures in Luxembourg to channel European business, using accounting practices that were ruled legal by European courts in 2023 but allow companies to minimise tax liabilities.

Public records show that Amazon EU Sarl, the Luxembourg-based holding entity, reported €70.4 billion ($82.8 billion) in EU e-commerce sales last year, nearly matched by expenses including staff costs. As a result, taxable profits amounted to just €180 million.

Despite the layoffs, political ties remain publicly cordial. In November, Luxembourg Prime Minister Luc Frieden met Amazon chief executive Andy Jassy in Seattle, calling the company a “vital partner” in a LinkedIn post. Jassy responded, “Luxembourg’s been an important home for Amazon and our 4,000 teammates there. Appreciated the discussion and partnership.”