After a strategic review, Amazon intends to lay off 9,000 more employees — on top of the 18,000 job cuts it previously announced, CEO Andy Jassy announced Monday.
The latest round of cuts will mostly affect employees in Amazon Web Services (AWS), People, Experience and Technology (PXT), advertising and Twitch divisions, according to Jassy. The company’s senior management team expects to make final decisions on which jobs will be eliminated by “mid to late April,” the CEO said.
“This was a difficult decision, but one that we think is best for the company long term,” Jassy wrote.
Jassy said economic “uncertainty” drove the decision to make the latest round of layoffs after several years of Amazon businesses adding “a significant amount of headcount.” As of Dec. 31, 2022, the ecommerce giant had about 1.541 million full-time and part-time employees, up nearly 19% compared with 1.298 million a year prior.
“For several years leading up to this one, most of our businesses added a significant amount of headcount,” 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 in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
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 severance-related expenses in the fourth quarter of 2022. For the first quarter of 2023, Amazon expects sales to grow between 4% and 8% compared with the year-earlier period, in-line with Wall Street forecasts. CFO Brian Olsavsky last month said Amazon anticipates slower growth rates “for the next few quarters.”
Read Jassy’s memo:
As we’ve just concluded the second phase of our operating plan (“OP2”) this past week, I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks — mostly in AWS, PXT, Advertising, and Twitch. This was a difficult decision, but one that we think is best for the company long term.
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 they want 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 one, most of our businesses added a significant amount of headcount. This made sense given what was happening in our businesses and the economy as a whole. However, given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount. The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole.
As our internal businesses evaluated what customers most care about, they made re-prioritization decisions that sometimes led to role reductions, sometimes led to moving people from one initiative to another, and sometimes led to new openings where we don’t have the right skills match from our existing team members. This initially led us to eliminate 18,000 positions (which we shared in January); and, as we completed the second phase of our planning this month, it led us to these additional 9,000 role reductions (though you will see limited hiring in some of our businesses in strategic areas where we’ve prioritized allocating more resources).
Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago. The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we’ve made them so people had the information as soon as possible. The same is true for this note as the impacted teams are not yet finished making final decisions on precisely which roles will be impacted. Once those decisions have been made (our goal is to have this complete by mid to late April), we will communicate with the impacted employees (or where applicable in Europe, with employee representative bodies). We will, of course, support those we have to let go, and will provide packages that include a separation payment, transitional health insurance benefits, and external job placement support.
If I go back to our tenet — being leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole — I believe the result of this year’s planning cycle is a plan that accomplishes 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 businesses in which we’re investing.
To those ultimately impacted by these reductions, I want to thank you for the work you have done on behalf of customers and the company. It’s never easy to say goodbye to our teammates, and you will be missed. To those who will continue with us, I look forward to partnering with you as we make life easier for customers every day and relentlessly inventing to do so.
Andy
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