Amazon to cut 9,000 more jobs as it looks to streamline costs, CEO says

Amazon is set to lay off a total of 27,000 employees as part of its ongoing cost-cutting efforts, CEO Andy Jassy announced in a memo to staff on Monday.

The latest round of layoffs, which will primarily impact Amazon’s cloud computing, human resources, advertising, and Twitch livestreaming businesses, will affect approximately 9,000 employees. This is in addition to the more than 18,000 positions that the company eliminated in a major cost-cutting bid earlier this year.

Jassy said that the decision to cut more jobs was made as the company looks to streamline costs in light of the economy and the “uncertainty that exists in the near future.” The company just completed the second phase of its annual budgeting process, referred to internally as “OP2,” with the overriding tenet being to be leaner while still investing in key long-term customer experiences.

The layoffs at Amazon come as the technology industry is facing a whiplash in pandemic-induced demand for digital goods and services and broader macroeconomic uncertainty. Several other Big Tech companies have also recently announced job cuts, including Facebook-parent Meta, which said it was laying off an additional 10,000 workers last week.

Amazon’s workforce swelled to more than 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019, after it went on a hiring spree during the Covid pandemic. However, the company is now looking to operate leaner, with Jassy taking a broad overview of the company’s expenses as it reckons with an economic downturn and slowing growth in its core retail business. Amazon has frozen hiring in its corporate workforce, axed some experimental projects, and slowed warehouse expansion.

In his memo, Jassy said that he remains optimistic about the company’s “largest businesses,” retail and Amazon Web Services, as well as new divisions that continue to warrant investment. However, the company’s shares closed down 1% on Monday.

Here’s the full memo from Jassy:

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.

Let me share some additional context.

As part of our annual planning process, leaders across the company work with their teams to decide what investments they want to make for the future, prioritizing what matters most to customers and the long-term health of our businesses. For several years leading up to this one, most of our businesses added a significant amount of headcount. This made sense given what was happening in our businesses and the economy as a whole. However, 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 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.

As our internal businesses evaluated what customers most care about, they made re-prioritization decisions that sometimes led to role reductions, sometimes led to moving people from one initiative to another, and sometimes led to new openings where we don’t have the right skills match from our existing team members. This initially led us to eliminate 18,000 positions (which we shared in January); and, as we completed the second phase of our planning this month, it led us to these additional 9,000 role reductions (though you will see limited hiring in some of our businesses in strategic areas where we’ve prioritized allocating more resources).

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. The same is true for this note as the impacted teams are not yet finished making final decisions on precisely which roles will be impacted. Once those decisions have been made (our goal is to have this complete by mid to late April), we will communicate with the impacted employees (or where applicable in Europe, with employee representative bodies). We will, of course, support those we have to let go, and will provide packages that include a separation payment, transitional health insurance benefits, and external job placement support.

If I go back to our tenet—being 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—I believe the result of this year’s planning cycle is a plan that accomplishes this objective. I remain very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, Stores and AWS, and our newer customer experiences and businesses in which we’re investing.

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. It’s never easy to say goodbye to our teammates, and you will be missed. To those who will continue with us, I look forward to partnering with you as we make life easier for customers every day and relentlessly inventing to do so.

Andy