Chief Executive Officer Andy Jassy Announcing the move in a memo to employees on Wednesday, it said it follows the company’s annual planning process. The cuts, which began last year, were previously expected to affect around 10,000 people. The shortages are concentrated in the firm’s corporate ranks, mostly in Amazon’s retail division and human resources functions such as recruiting.
“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” he said. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”
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Although Layoffs at Amazon have been looming for months – The company has admitted it has laid off too many people during the pandemic – a rising number that suggests the company’s approach has darkened. It joins other tech giants in making the big cut. Earlier on Wednesday, Salesforce Inc announced plans to eliminate about 10% of its workforce and reduce its real estate holdings.
Amazon investors reacted positively to the latest belt-tightening efforts, betting it could boost the e-commerce company’s profits. Shares climbed nearly 2% in late trading after The Wall Street Journal first reported on the plan.
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The 18,000 job cuts would be the biggest cut yet for tech companies during the current recession, but Amazon has a far larger workforce than its Silicon Valley peers. It had more than 1.5 million employees as of the end of September, meaning the latest cuts would represent about 1% of the workforce.
At the time the company was planning its cuts in November, a spokeswoman said Amazon has about 350,000 corporate employees worldwide.
The world’s largest online retailer spent late last year adjusting to a sharp slowdown in e-commerce growth as shoppers returned to pre-pandemic habits. Amazon delayed warehouse opening and halted hiring in its retail group. It widened the freeze for corporate employees of the company and then started making cuts.
JC has eliminated or reduced experimental and unprofitable businesses, including teams working on a telehealth service, delivery robots and children’s video-calling devices.
The Seattle-based company is also trying to align excess capacity with cooling demand. One effort involves trying to sell extra space on its cargo planes, according to people familiar with the matter.
Amazon, which started as an online bookstore, is shutting down parts of its business. But it continues to invest in its cloud-computing and advertising businesses, as well as video streaming.
The first wave of cuts fell heavily on Amazon’s Devices and Services group, which makes the Alexa digital assistant and Echo smart speakers, among other products. The head of the group told Bloomberg last month that the unit totaled fewer than 2,000 layoffs, and that Amazon was committed to the voice assistant.
Buyouts were offered to some recruiters and employees in the company’s human resources group. JC told employees in November that further cuts would be made to its retail and HR teams in 2023.
In Wednesday’s memo, JC said the company would provide severance, transitional health benefits and job placement to affected workers. He also reprimanded an employee for leaking the news, an apparent reference to the Wall Street Journal report. He said the company plans to begin discussions on steps with affected employees on January 18.
“Long-standing companies go through different phases,” Jesse said. “They’re not in the expansion mode of the heavy ones every year.”