Amazon will continue to lay off employees in the coming year, CEO Andy Jassy wrote in a memo to workers on Thursday.
“I’ve been in this role now for about a year and a half, and without a doubt, this is the most difficult decision we’ve made during that time (and, we’ve had to make some very tough calls over the past couple of years, particularly during the heart of the pandemic),” Jassy wrote. “It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions, and responsibilities whose lives will be impacted.”
The company this week began informing employees in some divisions, including devices and services, that they were being let go. It has also offered some employees the option to take a voluntary buyout as a means of trimming headcount in addition to the layoffs.
Amazon is aiming to lay off about 10,000 employees, though the total number of impacted workers remains fluid, a person familiar with the matter previously told CNBC. The cuts are being made as Amazon reckons with a worsening economy, which has slowed growth in some divisions and after its headcount ballooned during the pandemic.
Jassy said the layoffs will stretch into 2023 as the company is still in the midst of its annual operating planning process, and business leaders are still determining the need for further job cuts.
“Those decisions will be shared with impacted employees and organizations early in 2023,” Jassy wrote. “We haven’t concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organizations), but each leader will communicate to their respective teams when we have the details nailed down.”
Amazon had already implemented a hiring freeze in its corporate workforce as it looks to slow headcount growth. The company is still hiring warehouse workers to staff up for the holiday rush.
Job cuts are hitting the tech sector hard after years of unbridled growth. Facebook parent Meta last week laid off 13% of its staff, while Twitter, Shopify, Salesforce and Stripe have also announced cuts.
Here’s the full memo from Jassy:
Two weeks ago, Beth shared that S-team and I decided to pause new incremental hires in our corporate workforce. Today, I want to share some information about role eliminations. We are in the middle of our annual operating planning review where we look at each of our businesses and make decisions about what we believe we should change. Leaders across the company are 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 is more difficult due to the fact that the economy remains in a challenging spot and we’ve hired rapidly the last several years.
Yesterday, we communicated the difficult 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. Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments. Those decisions will be shared with impacted employees and organizations early in 2023. We haven’t concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organizations), but each leader will communicate to their respective teams when we have the details nailed down. And, as has been the case this week, we will prioritize communicating directly with impacted employees before making broad public or internal announcements.
I’ve been in this role now for about a year and a half, and without a doubt, this is the most difficult decision we’ve made during that time (and, we’ve had to make some very tough calls over the past couple of years, particularly during the heart of the pandemic). It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions, and responsibilities whose lives will be impacted. We are working to support those who are affected and trying to help them find new roles on teams that have a need; and in cases where that’s not possible, we are offering packages that include a separation payment, transitional health insurance benefits, and external job placement support.
Amazon has weathered uncertainty and difficult economies in the past, and we will continue to do so. We have big opportunities ahead, both in our more established businesses like Stores, Advertising, and AWS, but also in our newer initiatives that we’ve been working on for a number of years and have conviction in pursuing (e.g. Prime Video, Alexa, Kuiper, 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.
I want to thank each of you for your continuing contributions during this challenging time and as we gear up to deliver for customers during the busy shopping season.
Thanks,
Andy
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