Amazon CEO Andy Jassy wrote a memo to staff on Jan. 4 that the company will eliminate “just over 18,000 roles,” a much higher number than anticipated. “Several teams” will be affected by the layoffs. Still, most of them will be in Amazon Stores and People, Experience, and Technology (PXT), according to Jassy’s memo on the company’s blog. “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy wrote. “These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles.” The approximately 18,000 job cuts, including layoffs Amazon made last fall, represent about 1.2% of the 1.544 million full- and part-time employees the company reported on Sept. 30, 2022, per Variety. Jassy announced in November that Amazon would cut jobs in its Devices and Books businesses and offer voluntary buyouts to certain PXT employees. As “leaders continue to make adjustments,” he told employees there would be “more role reductions” going into 2023. About 10,000 jobs were being cut at the time, according to the New York Times.
At the Times’ DealBook conference in November, Jassy said that Amazon needed to make cuts due to the “more uncertain” economic climate: “We just felt like we needed to streamline our costs,” he said. After the Wall Street Journal reported earlier in the day that Amazon planned to pink-slip “more than 17,000” workers, Jassy sent a memo to Amazon employees Wednesday about the job cuts. Referring to the Journal report, Jassy wrote, “We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted. However, because one of our teammates leaked this information externally, we decided it was better to share this news earlier so you can hear the details directly from me.” According to Jassy, Amazon will begin contacting employees affected by the latest layoffs beginning on Jan. 18.
Videos by PopCulture.com
According to Morgan Stanley analysts, the e-commerce giant and the broader tech industry need to reduce costs even further, calling the layoffs an “important step…but we look for even more discipline” in cost-cutting measures for the company, Marketwatch reported. It is estimated that Amazon will save around $3.6 billion a year through layoffs, according to Morgan Stanley analysts. However, they were surprised at how many layoffs Amazon will make in its PXT teams. Analysts expect more trimming in the company’s segments devoted to devices and Alexa, Amazon’s AI assistant, which they estimate comprise the majority of the $10 billion to $15 billion in investments referred to as “other bets,” the outlet said. “We will look to see whether a significant portion of these headcount reductions will still becoming from these more expensive teams,” the analysts said.
