Amazon is reducing its workforce by the thousands, once again. In an internal memo (which has been made public since then) CEO Andy Jassy announced the company’s plans to eliminate another 9000 positions across its organization. This fresh round of layoffs is set to be conducted in the next few weeks (the company aims to have it done by mid to late April). According to the memo, the new round of layoffs also serves as the conclusion to the company’s second phase of its operating plan (OP2).
Jassy informed in the memo that the majority of the current round of layoffs will impact its Amazon Web Services (AWS), PXT (its experience and technology solutions), advertising, and the Twitch livestreaming business units, marking the latest round of job cuts in recent months. This development comes on the heels of the layoffs that the e-commerce giant announced in November 2022 and later extended into January. In case you missed it, that round of layoffs affected around 18,000 positions as part of the company’s cost-cutting bid. This takes the total number of employees axed by Amazon in the two rounds to 27,000 employees.
Shares of Amazon dropped by 2.6% in trading on the Nasdaq on Monday to be currently priced at $96.38.
“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.” Jassy wrote in the memo. “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,” he added. Of course, Amazon will reach out to the impacted employees and support them with severance packages – that come with a separation payment, transitional health insurance benefits, as well as support for external job placements.
This “uncertain economy” has been the reason for numerous firms – both high-profile enterprises and startups – trimming their workforces by hundreds (and thousands) over the past year. Numerous tech giants such as Microsoft, Salesforce, Alphabet, and Meta Platforms have joined the layoff wagon and slashed thousands of jobs in recent months.
What is ironic is that these reductions in workforces come soon after pandemic-led hiring sprees left the same firms overstaffed. Jassy alluded to the same in the memo, informing that the company had added a substantial number of staff in recent years, which “made sense given what was happening in our businesses and the economy as a whole.” Under the current macroeconomic scenario, however, this has backfired on the likes of Amazon, Meta, Alphabet, and others, who have had little choice but to lay off employees in order to streamline costs.