Amazon CEO Andy Jassy publicly addressed the company’s widespread layoffs for the first time and revealed that the corporate workforce reduction will continue into next year.
In a memo to employees posted to Amazon’s blog, Jassy confirmed that the company cut positions this week across the Devices and Books businesses, and offered voluntary reduction to employees in its People, Experience, and Technology (PXT) organization.
“Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments reports,” he said in the memo. “Those decisions will be shared with impacted employees and organizations early in 2023.”
Jassy said cutting staff “is the most difficult decision” the company has made during his tenure as CEO. Jassy, a longtime Amazon leader who previously ran Amazon Web Services, took over for founder Jeff Bezos last year.
The cuts could affect as many as 10,000 people, according to earlier reporting from The New York Times. If they go forward as expected, they would be the largest layoffs in the company’s history.
People familiar with the matter told GeekWire on Monday that the number of employees being laid off is fluid, because the decisions are being made in individual divisions. While the cuts may end up in the range of 10,000 people, there is no companywide target, the people said.
The layoffs come as Amazon and a number of other technology companies look for ways to cut costs amid a slowing economy. Amazon CFO Brian Olsavsky told analysts on Amazon’s recent earnings call that the company was preparing for “what could be a slower growth period” due to increased foreign currency headwinds, global inflation, fuel prices, and rising energy costs.
Amazon previously told employees that it would freeze corporate hiring, and the layoffs match moves made by Meta, Twitter, Lyft, Redfin, Convoy, Stripe, Flyhomes and many more companies.
Amazon went on a hiring spree during the pandemic to help meet demand as more people shopped online.
But the company’s headcount grew by just 21,000 employees during the third quarter. That compares an additional 133,000 workers in the year-ago period, and 248,500 people in the third quarter of 2020.
Amazon employs 75,000 people in the Seattle region, many of them corporate and tech workers, as part of its workforce of 1.54 million people around the world, including warehouse workers who will reportedly not be impacted by the layoffs.
Jassy ended his memo with an upbeat tone, writing that Amazon “has weathered uncertainty and difficult economies in the past, and we will continue to do so.”
“We have big opportunities ahead, both in our more established businesses like Stores, Advertising, and AWS, but also in our newer initiatives that we’ve been working on for a number of years and have conviction in pursuing (e.g. Prime Video, Alexa, Kuiper, Zoox, and Healthcare),” Jassy wrote. “The key will be to do what Amazon does best – obsess over customers and invent relentlessly on their behalf – and if we do that, we should all be very optimistic about Amazon’s future. I know I am.”
Read Jassy’s full memo below:
Two weeks ago, Beth shared that S-team and I decided to pause new incremental hires in our corporate workforce. Today, I want to share some information about role eliminations. We are in the middle of our annual operating planning review where we look at each of our businesses and make decisions about what we believe we should change. Leaders across the company are working with their teams and looking at their workforce levels, investments they want to make in the future, and prioritizing what matters most to customers and the long-term health of our businesses. This year’s review is more difficult due to the fact that the economy remains in a challenging spot and we’ve hired rapidly the last several years.
Yesterday, we communicated the difficult 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) organization. Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments. Those decisions will be shared with impacted employees and organizations early in 2023. We haven’t concluded yet exactly how many other roles will be impacted (we know that there will be reductions in our Stores and PXT organizations), but each leader will communicate to their respective teams when we have the details nailed down. And, as has been the case this week, we will prioritize communicating directly with impacted employees before making broad public or internal announcements.
I’ve been in this role now for about a year and a half, and without a doubt, this is the most difficult decision we’ve made during that time (and, we’ve had to make some very tough calls over the past couple of years, particularly during the heart of the pandemic). It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions, and responsibilities whose lives will be impacted. We are working to support those who are affected and trying to help them find new roles on teams that have a need; and in cases where that’s not possible, we are offering packages that include a separation payment, transitional health insurance benefits, and external job placement support.
Amazon has weathered uncertainty and difficult economies in the past, and we will continue to do so. We have big opportunities ahead, both in our more established businesses like Stores, Advertising, and AWS, but also in our newer initiatives that we’ve been working on for a number of years and have conviction in pursuing (e.g. Prime Video, Alexa, Kuiper, Zoox, and Healthcare). The key will be to do what Amazon does best – obsess over customers and invent relentlessly on their behalf – and if we do that, we should all be very optimistic about Amazon’s future. I know I am.
I want to thank each of you for your continuing contributions during this challenging time and as we gear up to deliver for customers during the busy shopping season.