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After a strategic review, Amazon plans to lay off another 9,000 employees — on top of the 18,000 job cuts 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, Jassy said. The company’s senior management team expects to make final decisions about which jobs will be eliminated “by mid-to-late April,” the CEO said.
“This is a difficult decision, but one we think is best for the company in the long term,” Jassi wrote.
Jassi said economic “uncertainty” drove the decision to make the latest layoffs after Amazon’s businesses added “significant headcount.” As of December 31, 2022, the e-commerce giant has approximately 1.541 million full-time and part-time employees, an increase of nearly 19% compared to 1.298 million in the previous year.
“Over the years, most of our businesses have added significant numbers,” Jassi wrote in the memo, which Amazon shared publicly. “It made sense what was going on with our businesses and the economy as a whole. However, given the uncertain economy we live in and the uncertainty of the future, we have chosen to be more streamlined in our spending and headcount.
Even with the additional cuts, Amazon will engage in “limited hiring” where it has “prioritized to allocate more resources to strategic areas,” Jassi said without elaborating.
Amazon has incurred severance-related costs of $640 million in the fourth quarter of 2022. In the first quarter of 2023, Amazon expects sales to grow 4% to 8% from a year earlier, in line with Wall Street forecasts. CFO Brian Olsavsky said last month that Amazon expects slower growth rates “for the next few quarters.”
Read Jassi’s note:
I’m writing to share that as we completed the second phase of our Operations Plan (“OP2”) last week, we’ll be eliminating approximately 9,000 positions over the next few weeks – mostly in AWS, PXT, Advertising, and Twitch. It’s a tough decision, but we think it’s 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 determine what investments they want to make in the future that are most important to customers and prioritize the long-term health of our businesses. Over the years, most of our businesses have added significant headcount. It meant what was happening to our businesses and the economy as a whole. However, given the uncertain economy we live in and the uncertainty of the future, we have chosen to be more streamlined in our costs and headcount. A key principle of our annual planning this year is lean, which enables us to invest more strongly in key long-term customer experiences.
As our internal businesses assessed what customers cared about most, they made re-prioritization decisions that sometimes led to stock reductions, sometimes to moving people from one venture to another, and sometimes to new openings where we didn’t have the right skills. Competition from our existing team members. This initially led to the elimination of 18,000 positions (which we shared in January); And that led us to these additional 9,000 job cuts as we completed the second phase of our planning this month (although you’ll see lower levels of 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 stock reductions along with the ones we announced a few months ago. The short answer is that not all teams are done with their analytics by late fall; Rather than rush through these assessments without due diligence, we chose to share these decisions as we made them, so that people can get information sooner. The same applies to this note as the affected teams have not yet made final decisions on exactly which roles will be affected. Once those decisions are made (our goal is to have this done by late April), we will contact affected employees (or, as applicable in Europe, employee representative bodies). Of course, we will support those we have to leave, and offer packages that include severance pay, interim health insurance benefits, and outplacement support.
If I go back to our theory—we believe that being lean enables us to invest more firmly in key long-term customer experiences that we believe can meaningfully improve the lives of customers and Amazon as a whole—and I believe that’s the result. This year’s planning cycle is a project to accomplish this objective. I’m very optimistic about the future and the myriad opportunities, both in our largest businesses, stores and AWS, and our new customer experiences and the businesses we invest in.
To those ultimately affected by these cuts, I want to thank you for your work on behalf of customers and the company. Saying goodbye to our teammates is never easy and you will be missed. For those who connect with us, I look forward to partnering with you to make life easier and relentlessly innovate for customers every day.