Andy Jassy, Chief Executive Officer of Amazon.Com Inc., during the GeekWire Summit in Seattle, Washington, U.S. on Tuesday, October 5, 2021.
David Ryder | Bloomberg | Getty Images
Amazon will lay off 9,000 more employees in the coming weeks, CEO Andy Jassy said in a memo to employees on Monday.
The cuts come on top of previously announced layoffs, which began in November and continued into January. This round affected more than 18,000 employees.
Amazon made the decision to lay off more employees to cut costs. It takes into account the economy as well as the “uncertainty that exists in the near future,” Jassy said. The company just completed the second phase of its annual budgeting process, referred to internally as “OP2.”
“The overarching tenet of our annual planning this year has been to be leaner and to do so in a way that allows us to continue to invest heavily in the most important long-term customer experiences that we believe transform customers’ lives and Amazon can meaningfully improve overall. ‘ said Jassi.
The latest round will primarily impact Amazon’s cloud computing, personal, advertising and Twitch live streaming businesses, Jassy said in the memo.
Amazon is cutting its headcount after having a hiring frenzy during the Covid-19 pandemic. The company’s global workforce grew to more than 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019.
Jassy is also taking a comprehensive review of the company’s spending as the company anticipates an economic downturn and slowing growth in its core retail business. Amazon froze hiring of its corporate workforce, canceled some experimental projects, and slowed warehouse expansion.
While the company aims to be leaner this year, Jassy said he remains bullish on the company’s “biggest businesses,” retail and Amazon Web Services, as well as other new areas it continues to invest in.
Here is Jassy’s full memo:
As we just completed phase two of our operational plan (“OP2”) last week, I would like to share that we plan to eliminate approximately 9,000 more jobs over the next few weeks – primarily across AWS, PXT, advertising, and Twitch . It was a difficult decision, but one that we believe is best for the company over the long term.
Let me share some additional context.
As part of our annual planning process, leaders across the business work with their teams to decide what investments they want to make for the future, prioritizing what’s most important to customers and the long-term health of our businesses. In the years leading up to this year, most of our divisions have added a significant number of employees. This made sense given what was happening in our businesses and in the economy at large. However, given the uncertain economy we are in and the uncertainty that will exist in the near future, we have decided to streamline our costs and headcount. The overarching tenet of our annual planning this year has been to be leaner and do it in a way that allows us to continue to invest heavily in the most important long-term customer experiences that we believe shape the lives of customers and Amazon overall meaningful improvement.
As our internal companies evaluated what matters most to clients, they made reprioritization decisions that sometimes resulted in role cuts, sometimes in employees being moved from one initiative to another, and sometimes in new job opportunities where we didn’t have the right skills Match from our existing team members. This initially resulted in us cutting 18,000 jobs (which we shared in January); and as we completed the second phase of our planning this month, it led us to those additional 9,000 job cuts (although you will see limited hiring at some of our companies in strategic areas where we have prioritized the allocation of more resources) .
Some may be wondering why we didn’t announce these role cuts with the ones we announced a few months ago. The short answer is that not all teams were finished with their analysis by late fall; Instead of rushing through these reviews without due diligence, we chose to share these choices as we made them, so people can get the information as quickly as possible. The same goes for this notice, as the impacted teams aren’t done making final decisions on exactly which roles are impacted. As soon as these decisions are made (our goal is to have them finalized by mid to late April), we will communicate with the affected employees (or employee representatives in Europe, where appropriate). Of course, we will support those we need to let go and offer packages that include a separation allowance, transitional health insurance benefits and outside job placement assistance.
Coming back to our tenet – to be leaner and do it in a way that allows us to continue to invest heavily in the core long-term customer experiences that we believe make meaningful improvements in customers’ lives and Amazon as a whole – I believe that the result of this year’s planning cycle is a plan that achieves this goal. I remain very optimistic about the future and the myriad opportunities we have, both across our largest businesses, Stores and AWS, as well as our newer customer experiences and businesses in which we invest.
To those ultimately impacted by these cuts, I want to thank you for the work you have done on behalf of customers and the company. Saying goodbye to our teammates is never easy and you will be missed. For those who will stay with us, I look forward to working with you as we make our customers’ lives easier and relentlessly invent to do so every day.
andy
This story evolves. Please check again for updates.