Amazon To Axe More Than 18,000 Jobs

CEO Andy Jassy has confirmed even more job losses at Amazon, after a staffer leaked the shock news the firm was planning a larger than expected number of job losses.

In an open letter Jassy said that Amazon plans “to eliminate just over 18,000 roles” – the largest tranche of layoffs in its history, with the bulk of the layoffs impacting “Amazon Stores and PXT organisations.”

Amazon’s People Experience and Technology Solutions (PXT) handle human resources and other functions.

Job losses

Back in November reports began surfacing that Amazon was planning large scale job losses, and then it emerged the firm would axe 10,000 jobs – with most of the job losses impacting Amazon’s devices organisation responsible for its Echo devices, its retail division, and ironically its human resources department.

Andy Jassy then confirmed that Amazon’s job losses would continue into 2023.

One of the Amazon areas hit the hardest divisions for job losses seemed to be the Amazon Alexa voice assistant unit, which reportedly fell out of favour at the e-commerce giant. This reportedly was because Alexa never managed to create an ongoing revenue stream for Amazon.

Indeed, it was reported at the time that just about every plan to monetise Alexa had failed, with one former employee calling Alexa “a colossal failure of imagination,” and “a wasted opportunity.”

Now Jassy in a letter on Thursday to Amazon staff, confirmed that more jobs will be axed at Amazon.

“This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” he wrote. “In November, we communicated the hard decision to eliminate a number of positions across our Devices and Books businesses, and also announced a voluntary reduction offer for some employees in our People, Experience, and Technology (PXT) organisation. I also shared that we weren’t done with our annual planning process and that I expected there would be more role reductions in early 2023.”

“Today, I wanted to share the outcome of these further reviews, which is the difficult decision to eliminate additional roles,” wrote Jassy. “Between the reductions we made in November and the ones we’re sharing today, we plan to eliminate just over 18,000 roles. Several teams are impacted; however, the majority of role eliminations are in our Amazon Stores and PXT organisations.”

Amazon said that it had preempted its planned announcement because of a leak, after the Wall Street Journal reported on the additional job cuts.

“We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted,” wrote Jassy. “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.”

“We intend on communicating with impacted employees (or where applicable in Europe, with employee representative bodies) starting on 18 January,” he added.

Cost cutting

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

The move comes as 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 of 2022 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 of 2022.

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

Amazon is not alone in announcing large-scale layoffs in early 2023.

Salesforce said on Wednesday it would reduce headcount by 10 percent, impacting over 7,000 employees.