In a fresh round of layoffs, Amazon has announced to cut 9,000 more jobs in the next few weeks, company's chief executive officer Andy Jassy said in a memo to staff on Monday. As per the announcement, this round of layoffs will hit its cloud computing unit AWS, its advertising business, the gaming platform Twitch which Amazon owns, and its PXT organisations, which handle human resources and other functions.
The 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. The company just wrapped up the second phase of its annual budgeting process, referred to internally as "OP2."
"As we’ve just concluded the second phase of our operating plan (“OP2”) 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," Jassy said in the memo, adding that company made the decision to lay off more employees as it looks to streamline costs.
"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," he said.
According to Jassy, the second phase of the company's annual planning process completed this month and led to the additional job cuts, however, he said that the company will still hire in some strategic areas.
"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 added.
The e-commerce company reported worse-than-expected fourth-quarter profits, but its revenue beat expectations boosted by sales in its cloud-computing unit AWS, which is also seeing a slow-down in growth.
The company said that it earned $300 million, or 3 cents per share, in the October-December quarter. Industry analysts were expecting the Seattle-based company to earn 17 cents a share, according to FactSet.
Amazon's fourth quarter profits represent a significant drop from the $14.3 billion it posted during the same period in 2021, when the company had a nearly $12 billion gain from its investment in Rivian Automotive.
Like other tech companies, Amazon ramped up hiring during the pandemic to meet the increasing demands of online business. As lockdown pushed people to keep at home, the company expanded its workforce and its warehouses, however, post lockdown the demands for buying stuff online decreased and Amazon stepped back on its warehouse expansion plan to avoid unnecessary expenses, leading to job cuts.
Jassy said, "Some may ask why we didn’t announce these role reductions with the ones we announced a couple 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."
Amazon shares were down 2.54 percent in early trade after the news of the layoff at 12.20 pm ET.
(Edited by : Anushka Sharma)
First Published: Mar 20, 2023 9:03 PM IST
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