By Karen Weise
Amazon plans to lay off 9,000 corporate and tech workers by the end of April, adding to the 18,000 roles it already cut late last year and this January, Andy Jassy, the company’s CEO, said in a note to employees earlier this week.
The new layoffs, which amount to less than 3% of its corporate workforce, will target workers in some of Amazon’s most profitable divisions, which had previously been spared, including Amazon’s cloud computing business and advertising operations. Those two segments of the business are much higher-margin operations than Amazon’s core retail business, according to financial analysts and filings.
Jassy wrote that the annual planning session the company’s leaders wrapped up had focused on streamlining costs and head count.
“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,” he wrote.
For more than a year, Jassy has been pursuing cost cuts at Amazon. The company rapidly added employees during the pandemic and put a priority on some projects that lacked obvious ways to become profitable. He has pulled back on expansion of the company’s warehouse operations, and paused work on the largest phase of Amazon’s planned second headquarters near Washington, D.C.
The company froze hiring last fall and by November had plans to lay off about 10,000 employees, a target that expanded to 18,000 in early January.
Amazon had about 380,000 corporate employees at the end of 2022, according to a person familiar with its workforce. Most of Amazon’s roughly 1.5 million employees are hourly workers who power its warehouse operations.
The tech industry is undergoing its largest contraction since the dot-com bust of the early 2000s. Nearly every major tech company has laid off workers. Last week Meta, the parent company of Facebook, announced plans to lay off about 10,000 employees, or roughly 13% of its workforce, part of what CEO Mark Zuckerberg called a “year of efficiency.” It had already laid off 11,000 workers late last year.
At Amazon, the initial layoffs last year affected employees working on the Alexa voice assistant and devices, then spread to other divisions, including teams working on plans for automated stores, drones and the company’s broader consumer retail business. Human resources employees — recruiters in particular — were affected as well.
In the latest quarter, which ended in December, Amazon reported almost no profit, driven in part by unexpected weakness in its cloud computing business.
Twitch, the livestreaming site popular with video gamers that Amazon bought in 2014, said it was laying off more than 400 people, about 22% of its total staff. In the uncertain economy, “user and revenue growth has not kept pace with our expectations,” Dan Clancy, Twitch’s CEO, said in a blog post. Clancy took over as CEO from Twitch’s longtime leader, Emmett Shear, last week.
Amazon’s share price was down a little more than 1% at the close of trading Monday.
Jassy said management had not yet determined the workers who would be laid off, but it expected to do so by mid- to late April. He said the company could still pursue some “limited hiring” in strategic areas.