The E-commerce giant, Amazon has announced that it would be cutting down 9,000 more jobs in the coming weeks, according to the memo released to the staff by CEO Andy Jassy on Monday.
This recent layoff is coming on the back of the previously announced lay off which started in November and extended to January. The number of staff laid off amounted to 18,000 employees, which affected departments like retail, recruiting, and human resources.
Amazon disclosed that this decision to lay off more employees is to streamline costs, taking into account the economy as well as ” uncertainty that exists in the near future,”. Jassy shared. Amazon just wrapped up the second phase of its annual budgeting process, which was referred to internally as “OP2”.
Jassy said, “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,”.
Amazon Cuts 9,000 More Jobs Adding To 18,000 Announced In January
The latest layoff, however, impacted Amazon’s cloud computing, human resources, advertising, and Twitch live-streaming businesses according to Jassy’s memo. Dan Clancy, Twitch CEO disclosed that about 400 people would be laid off in this recent Amazon job cut. Clancy also tied the recent layoff to the economic downturn and also mentioned that Twitch’s users and revenue have not grown up to the expected results.
Amazon, which had gone on a hiring spree during the pandemic in 2020, has undergone the biggest layoffs in the company’s history. While the company’s global workforce increased to 1.6 million by the end of 2021, rising from 798,000 in the fourth quarter of 2019.
Amazon’s CEO also shared a broad overview of the company’s expenses during the economic downturn and the slow growth experienced in its core retail business. Amazon also stopped hiring in its corporate workforce, cutting short some experimental projects and delaying warehouse expansion.
Amazon’s CEO is however optimistic that the company’s largest businesses which are retail and Amazon Web Services, as well as other, new divisions, will continue to receive investment. Amazon shares closed at 1% on Monday.
Here’s the full memo from Jassy:
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 in 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 of 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.