Amazon chief executive officer Andy Jassy said that Amazon will cut 9000 more jobs in the next few weeks. Last week, Meta announced its second round of layoffs which saw 10,000 employees lose their jobs, according to media reports.
“Some may ask why we didn’t announce these role reductions with the ones we announced a couple of months ago. The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we’ve made them so people had the information as soon as possible,” Jassy said in a statement.
Layoff would mark the second largest round of job cuts after the company began layoffs in November last year, which extended to January, affecting over 18,000 employees in that round. As of early February, more than 67,000 jobs had been eliminated across the industry since the beginning of the year, according to data compiled by Bloomberg.
“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,”
The second phase of the company’s annual planning process was completed this month and led to the additional job cuts, however, he said that the company will still hire in some strategic areas. He further added in the report,
“The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole.”
The job cuts to Amazon’s cloud-computing unit come as cloud customers have looked to save money on infrastructure and software costs, according to Rick Villars, an analyst with IDC. At the same time, new growth opportunities for cloud companies, such as in artificial intelligence, aren’t yet making a significant impact, he said.
“With Amazon being one of the biggest players in the cloud arena, it’s going to be visible in their numbers,” Mr. Villars said. Cloud spending in the U.S. grew by 27% in the fourth quarter, lower than the 31% average growth rate of the previous four quarters, according to market analytics firm Synergy Research Group.
Brian Olsavsky, Amazon’s chief financial officer, that month said the company had seen a continued slowdown in AWS spending as customers have looked to rein in costs. Amazon’s advertising business, which has become a meaningful sales driver, also saw a slowdown in the fourth quarter, recording a 19% increase in sales. AWS, Mr. Olsavsky said, would likely experience challenges.
The Athena Coalition, a labor and activist group that is critical of Amazon, said in a statement: “None of these layoffs have to happen. Jassy is choosing to make them happen to pad Amazon’s bottom line.”
The company has scaled back or shut down entire services like its virtual primary care offering for employers in recent months.
Twitter has also announced multiple rounds of redundancies since Elon Musk’s $44bn (£36bn) takeover last autumn, amid a sharp drop-off in the advertising bookings that represent the majority of its revenue. Other tech firms that have announced significant layoffs include Microsoft, Google owner Alphabet, and business software company Salesforce.
Tech firms laid off more than 150,000 workers globally last year, according to the website Layoffs.fyi, with a further 139,000 layoffs already announced in 2023, including Amazon’s latest announcement. Tech firms have been cutting jobs due to uncertain economic conditions in big markets such as the US, as well as adjusting their cost bases after expanding too much during the coronavirus pandemic.
In his letter to workers on Monday, Jassy said: “As we’ve just concluded the second phase of our operating plan this past week, I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks – mostly in AWS, PXT, advertising and Twitch.
“This was a difficult decision, but one that we think is best for the company long term. To those ultimately impacted by these reductions, I want to thank you for the work you have done on behalf of customers and the company.”