In mid-November, US e-commerce giant Amazon was reported to be planning 10,000 job cuts, but the full of extent of the layoffs has now been confirmed in an update issued by Amazon CEO Andy Jassy on Thursday (January 5).
The company plans “to eliminate just over 18,000 roles” and several teams will be impacted, according to Jassy. The majority of the job cuts will affect the firm’s Amazon Stores and PXT organizations.
That 18,000 figure is, obviously enough, nearly double the number of expected cuts first reported in November, just two weeks after Amazon told staff in a memo that it was implementing a hiring freeze.
According to Amazon CEO Andy Jassy’s memo, the company “communicated the hard decision to eliminate a number of positions” across its Devices and Books businesses in November, and also announced “a voluntary reduction offer for some employees” in its People, Experience, and Technology (PXT) organization.
He added: “I also shared that we weren’t done with our annual planning process and that I expected there would be more role reductions in early 2023.
“Today, I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles. Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles.”
Jassy also told employees in his memo this week that an “uncertain economy and that we’ve hired rapidly over the last several years” made this year’s review of its business and workforce levels “more difficult”.
The layoffs at Amazon follow similar moves by other tech giants in 2022. This trend emerged amidst challenging macroeconomic factors including a slowdown in online ad spend, as well as a tech hiring boom during the pandemic.
Facebook parent Meta for example, announced in November that it was reducing its workforce by 3%, totaling 11,000 layoffs.
Meta founder and CEO Mark Zuckerberg told employees in November that Meta’s challenges started with Covid when the “world rapidly moved online and the surge of e-commerce led to outsized revenue growth”.
Across the entire US tech sector, Crunchbase estimates that as of late December, over 91,000 workers lost their jobs in 2022.
In August, social media firm Snapchat revealed that it was planning to lay off approximately 20% of its employees.
Also in August, SoundCloud started the process of reducing its own global workforce by approximately 20%.
In July, ByteDance-owned short-form video streaming platform TikTok was reported to have started laying off some of its staff in the US, and preparing to cut workers in Europe.
Twitter also laid off half of its workforce after new owner Elon Musk carried out a wide-ranging restructuring.
“Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year”.
Andy Jassy, Amazon
Elsewhere in his memo, Amazon’s Jassy told employees that the company, “has weathered uncertain and difficult economies in the past, and we will continue to do so” and that “companies that last a long time go through different phases. They’re not in heavy people expansion mode every year”.
In 2001, Amazon slashed 1,500 jobs, accounting for 15% of its workforce at the time during the ‘dot-com crash.’
You can read Jassy’s memo in full below:
As I shared back in November, as part of our annual planning process for 2023, leaders across the company have been working with their teams and looking at their workforce levels, investments they want to make in the future, and prioritizing what matters most to customers and the long-term health of our businesses. This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years. In November, we communicated the hard decision to eliminate a number of positions across our Devices and Books businesses, and also announced a voluntary reduction offer for some employees in our People, Experience, and Technology (PXT) organization. I also shared that we weren’t done with our annual planning process and that I expected there would be more role reductions in early 2023.
Today, I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles. Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles. Several teams are impacted; however, the majority of role eliminations are in our Amazon Stores and PXT organizations.
S-team and I are deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted. We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support.
We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted. However, because one of our teammates leaked this information externally, we decided it was better to share this news earlier so you can hear the details directly from me. We intend on communicating with impacted employees (or where applicable in Europe, with employee representative bodies) starting on January 18.
Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so. These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles. Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year. We often talk about our leadership principle Invent and Simplify in the context of creating new products and features. There will continue to be plenty of this across all of the businesses we’re pursuing. But, we sometimes overlook the importance of the critical invention, problem-solving, and simplification that go into figuring out what matters most to customers (and the business), adjusting where we spend our resources and time, and finding a way to do more for customers at a lower cost (passing on savings to customers in the process). Both of these types of Invent and Simplify really matter.
To those impacted by these reductions, I want you to know how grateful I am for your contributions to Amazon, and the work you have done on behalf of customers. You have made a meaningful difference in a lot of customers’ lives. To those who will continue on the journey with us, I look forward to partnering with you to keep making life better and easier for customers every day and relentlessly inventing to do so.
AndyMusic Business Worldwide