9,000 more employees will lose their jobs, says CEO Andy Jassy – Variety
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After a strategic review, Amazon intends to lay off 9,000 more employees — on top of the 18,000 layoffs it previously announced, CEO Andy Jassy announced Monday.
The latest round of cuts will mostly affect employees in the Amazon Web Services (AWS), People, Experience and Technology (PXT), advertising and Twitch divisions, according to Jassy. The company’s top management expects to make final decisions about which jobs will be eliminated 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 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 employees.” As of December 31, 2022, the e-commerce giant had about 1.541 million full-time and part-time employees, up nearly 19% compared to 1.298 million the previous year.
“For several years leading up to this one, most of our businesses have added significant numbers of employees,” Jassy wrote in the memo, which Amazon shared publicly. “This made sense given what happened in our businesses and the economy as a whole. But given the uncertain economy we live in, 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 have 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 to the same period last year, in line with Wall Street forecasts. CFO Brian Olsavsky said last month that Amazon expects lower growth rates “for the next several quarters.”
Read Jassy’s note:
As we have just completed the second phase of our operational plan (“OP2”) this past week, I am writing to share that we intend to eliminate approximately 9,000 additional positions over the next few weeks – mostly in AWS, PXT, Advertising, and Twitch. This was a difficult decision, but one that we believe is best for the company in the 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 our customers and the long-term health of our businesses. For several years leading up to this, most of our businesses have added a significant number of employees. This made sense given what happened in our businesses and the economy as a whole. But given the uncertain economy we live in, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and number of employees. The overarching principle of our annual planning this year was to be leaner while doing so in a way that allows us to continue to invest robustly in the most important long-term customer experiences that we believe can meaningfully improve our customers’ lives and Amazon as a whole .
As our internal businesses evaluated what customers care about most, they made reprioritization 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 led us to initially eliminate 18,000 positions (which we shared in January); and as we completed the second phase of planning this month, it led us to these additional 9,000 role reductions (although you will see limited hiring in some of our businesses in strategic areas where we have prioritized allocating more resources).
Some may ask why we didn’t announce these role reductions with the ones we announced a couple of months ago. The short answer is that not all teams were done with their analyzes in the late fall; and rather than rushing through these assessments without due diligence, we chose to share these decisions as we made them so that people had the information as soon as possible. The same goes for this note as the affected teams have not yet finished making final decisions on exactly which roles will be affected. Once these decisions have been made (we aim to have this completed by mid to late April), we will communicate with the affected employees (or, where applicable in Europe, with employee representatives). We will of course support those we have to let go of, and will provide packages that include separation pay, transition allowance to health insurance and external support for job placement.
Going back to our founding principle—to be leaner while doing so in a way that allows us to continue to invest robustly in the important long-term customer experiences that we believe can improve customers’ lives and Amazon as a whole—I think the outcome of this year’s planning cycle is a plan that achieves this goal. 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 that we invest in.
To those who will ultimately be affected by these reductions, I want to thank you for the work you have done on behalf of our customers and the company. Saying goodbye to our teammates is never easy and you will be missed. To those who want to continue with us, I look forward to working with you as we make life easier for customers every day and relentlessly continue to do so.
Andy
