Amazon.com Inc has announced today that it is looking to cut down an additional 9,000 employees in the coming weeks. This round of layoffs follows a mass layoff that eliminated more than 18,000 jobs a few months ago. Those affected this time will come from mostly AWS, PXT, Advertising, and Twitch departments.
This is coming after Andy Jassy, the CEO, confirmed in a statement that the company has just concluded the second phase of its operating plans (“OP2”), and there is still huge uncertainty about the economy.
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.
The CEO also stated that despite the company’s recent substantial hiring, it is now on a mission to reduce costs and headcounts to run leaner operations this year as it deals with the economy’s downturn and the slowing growth of its main retail business.
The decision of the Amazon CEO is coming just a week after another big tech giant. Facebook-parent Meta Platforms had a second layoff of over 10,000 jobs after a massive first layoff of 11,000 jobs.
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Why is Amazon having a second wave of layoffs?
Although it might have appeared that Amazon was firing off more and more employees, the CEO has provided a plausible justification for the decision, which comes even after a first wave of over 18,000 staff layoffs that have already been publicized.
The company’s global workforce grew massively to more than 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019. But with the macroeconomic downturns, there was a need for a re-strategizing plan for the company.
The teams allegedly conducted analyses in the late fall, and some of the findings supported the need for headcount reduction. Not all teams, though, received their evaluation results on schedule. Andy Jassy added that he hoped for a final judgment on these uncertain choices by mid-to-late April.
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.
Those affected employees will receive packages that include severance pay, transitional health insurance benefits, and external job placement support.
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What next for Amazon
These decisions by Amazon to become leaner are intended to allow it to continue investing heavily in the important long-term customer experiences that it thinks can significantly improve both the lives of its customers and Amazon as a whole.
Andy Jassy is still very optimistic about the future and the company’s many possibilities, both in its largest businesses, Stores and AWS, and its newer customer experiences and businesses, in which they are presently investing, according to the results of this year’s planning cycle.
Lastly, despite the layoffs, Amazon is still down for more hiring. Although, it will be limited hiring in some of its businesses in strategic areas where they have prioritized allocating more resources.
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