Amazon to cut 9,000 more jobs after earlier lay-offs

Chief executive Andy Jassy blames the group’s latest round of job cuts on an ‘uncertain economy’ and more instability in the near future.

Amazon.com said it would cut 9000 more corporate jobs across units that include its profitable cloud-computing and advertising businesses, a sign that the company’s cost-cutting is extending into all aspects of its operations as technology giants continue to slash spending.

Chief executive Andy Jassy said in a statement that the company added a significant number of employees in recent years, a step he defended as necessary given what was happening in Amazon’s business at the time.

“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,” Mr Jassy said.

The company previously said it was slashing 18,000 positions. Waves of job cuts have roiled the tech industry. Amazon is the latest company to enact more job cuts than previously expected. Last week, Facebook parent Meta Platforms said it would cut roughly 10,000 jobs over the coming months, its second wave of mass lay-offs.

Amazon invested heavily in expanding its headcount during the early part of the Covid-19 pandemic, as people shifted much of their shopping online. The company added about 800,000 employees, mostly at its hundreds of warehouses, between the end of 2019 and end of 2021. When demand began to fall off as consumers returned to bricks-and-mortar stores, Amazon cut back in areas of the business that were unprofitable and froze hiring.

Mr Jassy said the 9000 additional job cuts weren’t announced earlier because some teams hadn’t completed assessments that determined which positions needed to be eliminated. He said the cuts would be completed by mid- to late April. Amazon had about 1.5 million employees worldwide at the end of December. It employed about 35,000 corporate workers before its recent lay-offs.

Since 2022, lay-off tallies at tech companies have reached about 300,000 workers, according to Layoffs.fyi, a site tracking job cuts in the industry.

Amazon has been passing through one of the toughest stretches of its history. The company recently finished laying off 18,000 corporate employees, or about 5 per cent of the total. Those cuts were concentrated in its devices business and recruiting and retail operations.

In addition to the announced job cuts, Amazon has made other changes that are likely to lead to higher voluntary turnover than in recent years. The company isn’t adjusting its stock-heavy compensation plans, meaning many employees will effectively have their pay cut this year.

Amazon recently announced a return-to-office plan beginning next month that has not been well received by some employees.

Amazon has also cut back on projects and pulled back investment in certain areas. Earlier this month, it confirmed it was pausing construction on a massive corporate real estate complex near Washington DC that it calls its second headquarters, or HQ2. While the first phase of its project is nearly complete, Amazon had originally planned to break ground on the second phase of the project, which includes three 22-storey office buildings, during the first quarter of 2023.

On the same day it revealed its plans for HQ2, it also said it would close eight of its cashierless Amazon Go stores in Seattle, New York City and San Francisco on April 1. The closings add to other struggles Amazon has had in physical retail, including closing its book stores in 2022. In recent months the company has also cancelled certain projects such as its AmazonSmile charitable program.

Amazon grew rapidly during the pandemic, bolstered by overwhelming demand for its e-commerce services. But like many of its tech peers, it has struggled with growth recently. In February the company warned it may have a period of slower growth, including in its profitable AWS business, which in the fourth quarter saw its lowest growth rate since Amazon began to separate the segment’s performance in earnings.

The Wall Street Journal