Amazon announces more layoffs after letting go of 18,000 employees recently
The hiring spree that Amazon indulged in for most of the pandemic has officially ended as the company just announced another round of layoffs. After the company’s global workforce swelled to more than 1.6 million at the end of 2021, Amazon started the process of the most extensive layoffs in its history. The downsizing began late last year when the e-commerce giant announced that 18,00 employees from its retail, devices, recruiting, and human resources groups would be let go.
That process, considered the tech giant’s second phase of its operating plan (OP-2), was concluded this past week, according to Andy Jassy, the CEO of Amazon. The end of that process also made Amazon realize that it would need to eliminate 9,000 more positions in the next few weeks.
The annual planning process.
For context, the tech giant observes a twice-annual planning process dubbed OP-1 and OP-2. “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 noted in a company-wide memo yesterday.
That said, he shared how most Amazon businesses added a significant headcount for several years leading up to this one. “This made sense given what was happening in our businesses and the economy as a whole,” he reiterated. However, given the current uncertain economy, and the uncertainty that exists in the near future, Amazon has chosen to be more streamlined in its costs and headcount.
“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),” Jassy said.
The first round of layoffs primarily affected Amazon staffers in its retail, devices, recruiting, and human resources groups. The latest round will mainly impact Amazon’s cloud computing, human resources, advertising, and Twitch live-streaming businesses, Jassy said in his memo. He also explained that these role reductions were not announced in the first round in November because Amazon did not want to rush with its layoffs.
“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, we will communicate with the impacted employees (or, where applicable in Europe, with employee representative bodies),” Jassy said. Amazon’s goal is to complete the process by mid to late April.
Optimism and leanness.
While the company aims to operate leaner this year, Jassy said he remains optimistic about the company’s “largest businesses,” retail and Amazon Web Services, as well as other new divisions that continue to warrant investment. In a memo to Twitch staffers on Monday, Twitch CEO Dan Clancy confirmed that the Amazon-owned live-streaming platform was letting go of some 400 employees.
“Like many companies, our business has been impacted by the current macroeconomic environment, and user and revenue growth has not kept pace with our expectations,” Clancy wrote. “In order to run our business sustainably, we’ve made the very difficult decision to shrink the size of our workforce.”
The second round of layoffs in Amazon came a week after Facebook parent Meta said it was laying off an additional 10,000 workers on top of the 11,000 job cuts announced late last year.
3 October 2023
3 October 2023
3 October 2023