Amazon.com Inc. Chief Executive Andy Jassy has for the first time publicly addressed reports that the company is poised to cut more than 10,000 workers in a series of layoffs that could stretch into the new year.
News of the layoffs was first reported by the New York Times on Monday, which said they would affect less than 1% of Amazon’s workforce. The cloud computing and retail giant was believed to have around 1.6 million full-time and part-time employees globally at the end of 2021, up from just 798,000 at the end of 2019.
According to the Times, the job cuts would primarily be targeted at corporate and technology roles within Amazon, with the majority expected to take place within its devices business, retail division and human resources groups. That appears to be the case, for in a letter posted to Amazon’s blog, Jassy (pictured) confirmed that the first round of layoffs had already taken place this week within its Devices and Books businesses. The CEO explained that he has also offered voluntary reductions to employees within the company’s People, Experience and Technology organization.
“Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments reports,” Jassy said. “Those decisions will be shared with impacted employees and organizations early in 2023.”
Jassy explained that the layoffs were “the most difficult decision” he has been forced to make since taking over as CEO from Amazon founder Jeff Bezos last year. If 10,000 people do lose their jobs, it would be the largest round of layoffs in the history of Amazon.
The restructuring comes at a time when many technology firms are being pressured to cut costs amid a stagnant economy. They were not unexpected, as Amazon Chief Financial Officer Brian Olsavsky told analysts during a recent earnings call that the firm was bracing itself for a “slower growth period” that was blamed on a combination of global inflation, foreign currency headwinds, fuel prices and rising energy costs. Days later, Amazon told staff it was temporarily freezing corporate hiring. The decision to layoff staff has already been taken at many other tech firms, including Facebook’s parent company Meta Platforms Inc., Twitter Inc., Lyft Inc., Stripe Inc., Flyhomes Inc. and others.
Throughout the global COVID-19 pandemic, Amazon embarked on a hiring spree to ensure it had the workers it needed to process a deluge of new orders as most people began shopping online. However, the pace of hiring has slowed rapidly. During the third quarter, it added just 21,000 new employees globally, compared to 133,000 in the same quarter a year earlier. Amazon has said that its warehouse workers will not be impacted by the layoffs.
Jassy signed off on his memo with a more upbeat message, saying that the company “has weathered uncertainty and difficult economies in the past, and we will continue to do so.” He pointed to some big opportunities that lay ahead, for both its more established businesses like Stores, Advertising and Amazon Web Services, as well as newer initiatives like Zoox and Healthcare.
“The key will be to do what Amazon does best – obsess over customers and invent relentlessly on their behalf – and if we do that, we should all be very optimistic about Amazon’s future. I know I am,” Jassy said.
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