Amazon Begins Culling Device Unit Staff, Amid 10,000 Layoffs

Amazon has reportedly begun axing its workforce on Tuesday, after staff at Amazon’s devices and services team were notified they had lost their jobs.

It comes after the New York Times reported that Amazon will axe 10,000 jobs this week, with the bulk of the job losses reportedly focused on Amazon’s devices organisation, its retail division, and ironically its human resources department.

Amazon is to follow similar moves by other tech giants such as Meta and Twitter, and will axe about 10,000 jobs as soon as this week.

Worsening economy

Amazon like other tech players had already implemented a hiring freeze and stopped expansion of its warehousing capacity in the US and elsewhere.

The move comes as Amazon CEO Andy Jassy seeks to rein in costs as the company grapples with slowing growth in its core retail business, which still accounts for the lion’s share of Amazon’s revenue.

Retail (consumer) sales had surged during the Covid-19 pandemic, as consumers stayed at home and avoided physical shops, and turned to online retailers.

But by early 2022, e-commerce spending began to decelerate, and Amazon in the first quarter reported its slowest rate of revenue growth since the dot-com bust in 2001.

It also posted its first quarterly net loss since 2015.

And things did not get much better in the second quarter.

In July Amazon posted its second straight quarterly loss after a $3.9 billion write down of its investment in Rivian Automotive.

Layoffs begin

Now CNBC has obtained a copy of a memo from Amazon’s hardware chief Dave Limp on Wednesday, which reveals that the e-commerce giant has already begun laying off members of its devices and services team.

The e-retailer is consolidating some teams and programs in its devices and services unit after “a deep set of reviews” of the business, Limp wrote.

Amazon began notifying impacted employees yesterday, he added.

Here’s the full memo from Dave Limp obtained by CNBC:

Folks,

At our last Town Hall in July, I talked a bit about the state of our economy. As you know, we continue to face an unusual and uncertain macroeconomic environment. In light of this, we’ve been working over the last few months to further prioritize what matters most to our customers and the business. After a deep set of reviews, we recently decided to consolidate some teams and programs. One of the consequences of these decisions is that some roles will no longer be required. It pains me to have to deliver this news as we know we will lose talented Amazonians from the Devices & Services org as a result. I am incredibly proud of the team we have built and to see even one valued team member leave is never an outcome any of us want.

We notified impacted employees yesterday, and will continue to work closely with each individual to provide support, including assisting in finding new roles. In cases where employees cannot find a new role within the company, we will support the transition with a package that includes a separation payment, transitional benefits, and external job placement support. We know people across the organization may be impacted differently by this news and will lead with compassion for all team members.

While I know this news is tough to digest, I do want to emphasize that the Devices & Services organization remains an important area of investment for Amazon, and we will continue to invent on behalf of our customers. Having gone through times like this in the past I know that when there’s a difficult economy, customers tend to gravitate to the companies and products they believe have the best customer experience and that take care of them the best. Historically, Amazon has done a very good job at this.

Thank you for the support and empathy that I know our team will show each other during this time. Please don’t hesitate to ping me or your manager if you have any questions.

Dave-