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Following a strategic review, Amazon plans to lay off an additional 9,000 workers — in addition to the 18,000 jobs it previously announced, CEO Andy Jassy announced Monday.
According to Jassy, the latest round of cuts will mainly affect employees in Amazon Web Services (AWS), People, Experience and Technology (PXT), advertising and Twitch. The company’s senior management team expects to make final decisions on the jobs to be cut by “mid to late April,” the CEO said.
“This was a difficult decision, but one that we believe is best for the company in the long run,” Jassy wrote.
Jassy said economic “uncertainty” was the reason for the decision to go through the latest round of layoffs after several years of Amazon companies adding “a significant number of staff”. As of December 31, 2022, the e-commerce giant employed approximately 1.541 million full-time and part-time employees, nearly 19% more than 1.298 million a year earlier.
“For several years leading up to this one, most of our companies have added a significant number of employees,” Jassy wrote in the memo, which Amazon shared publicly. “This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy we are in and the uncertainty that exists in the near future, we have chosen to streamline our costs and staffing more.”
Even with the additional cuts, Amazon will engage in “limited hiring” in “strategic areas where we’ve prioritized allocating more resources,” Jassy said, without elaborating.
Amazon incurred $640 million in layoff-related costs in the fourth quarter of 2022. For the first quarter of 2023, Amazon expects revenue to grow between 4% and 8% compared to the same period last year, in line with Wall Street forecasts. CFO Brian Olsavsky said last month that Amazon expects slower growth rates “for the coming quarters.”
Read Jassy’s memo:
As we just completed the second phase of our operating plan (“OP2”) last week, I am writing to share that we plan to eliminate approximately 9,000 more positions in the coming weeks – primarily in AWS, PXT, Advertising and Twitch. This was a difficult decision, but one that we believe is best for the company in the long run.
Let me share some additional context.
As part of our annual planning process, leaders across the company work with their teams to decide what investments to make for the future, prioritizing what matters most to customers and the long-term health of our businesses. For several years leading up to this, most of our companies have added a significant number of employees. This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy we are in and the uncertainty that exists in the near future, we have chosen to streamline our costs and staffing more. The overriding principle of our annual planning this year has been to be leaner while doing it in a way that allows us to still invest robustly in the key long-term customer experiences that we believe will change the lives of customers and improve Amazon as a whole in a meaningful way.
As our internal companies evaluated what customers care about most, they made reprioritization decisions that sometimes led to job cuts, sometimes to transfers of people from one initiative to another, and sometimes to new job opportunities where we don’t have the right skills match of our existing team members. This initially led us to cut 18,000 positions (which we shared in January); and as we completed the second phase of our planning this month, it led to these additional 9,000 job cuts (although in some of our companies you will see limited hiring in strategic areas where we’ve prioritized allocating more resources).
Some may wonder why we didn’t announce these feature reductions with the ones we announced a few months ago. The short answer is that not all teams finished their analyzes in late fall; and rather than rush these assessments without due diligence, we chose to share these decisions as we made them so that people have the information as quickly as possible. The same goes for this note, as the teams involved are not yet done making final decisions about exactly which roles will be affected. Once those decisions are made (our goal is to complete this mid to late April), we will communicate with affected employees (or, if applicable in Europe, employee representatives). We will, of course, support those we have to let go, and will offer packages that include divorce benefits, temporary health insurance and outside job placement support.
If I go back to our principle — being leaner while doing this in a way that allows us to still invest robustly in the key long-term customer experiences that we believe will improve the lives of customers and Amazon as a whole in a meaningful way – I believe the outcome of this year’s planning cycle is a plan that achieves this objective. I remain very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, Stores and AWS, and our newer customer experiences and companies we invest in.
To those ultimately affected by these cuts, I want to thank you for the work you’ve done on behalf of customers and the company. It is never easy to say goodbye to our teammates and we will miss you. To those who stay with us, I look forward to working with you as we make customers’ lives easier every day and relentlessly invent to do so.
Andy
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