SEATTLE — Amazon CEO Andy Jassy announced in a post published Wednesday that the tech giant will eliminate over 18,000 roles.
The total number of layoffs includes those announced in Nov. 2022, with a second wave expected to start in mid-January, Jassy said.
He said Amazon typically waits to announce the layoffs to the public after speaking with the people impacted, but an employee leaked the information before the company could reach out to the affected employees.
Jassy said several teams are impacted, but the majority of role eliminations will be in Amazon Stores and PXT organizations.
"This is a huge deal for Amazon, they haven't had layoffs this size ever, and if you just think of when they last had big layoffs, [they were a] smaller company, during the Great Recession," said Spencer Soper, a technology reporter for Bloomberg who has covered Amazon for a decade.
"They're up to 1.5 million employees now around the globe, so that makes the 18,000 sound fairly small, but this is one of those tipping point things," Soper said. "When you have a company that's growing, growing, adding facilities, adding people like crazy, to all of a sudden- tap the brakes, not building as much new stuff, having too much capacity, having too many people... that was their overall acknowledgment."
The online retail giant, like other tech and social media giants, saw sizable profits during the COVID-19 pandemic, as homebound shoppers purchased more items online. But revenue growth slowed as the worst of the pandemic eased and consumers relied less on e-commerce.
The Seattle-based company reported two consecutive losses in 2022, driven mainly by write-downs of the value of its stock investment in electric vehicle start-up Rivian Automotive. The company returned to profitability during the third quarter, but investors were gloomy about its weaker-than-expected revenue and lackluster projections for the current quarter, which is typically good for retailers due to the holiday shopping season.
"This latest round, they're talking about basically their retail devision- which is Amazon's oldest business," Soper said. "It started as an online bookstore, it's been selling goods online, that's still its biggest business, what brings in the most money- it's also the most mature business, so it's not growing as quickly as some of the other things like cloud computing, or video streaming efforts, [and for PXT], it's basically people in human resources, recruiters, on-boarders- if they're not going to be hiring as many people, those people have nothing to do. So it makes sense for them to go."
Amazon plans to speak with impacted employees starting on Jan. 18, Jassy said in his post. The company will offer separation payment, transitional health insurance benefits and help for external job placement.
"S-team and I are deeply aware that these role eliminations are difficult for people and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted," Jassy said in the post.
Amazon did not confirm to KING 5 Thursday how many of the 18,000 cuts would take place in Washington.
In November, Amazon began mass layoffs in its corporate ranks, becoming the latest tech company to trim its workforce amid rising fears about the wider economic environment. The company laid off about 260 workers at various facilities that employ data scientists, software engineers and other corporate workers. Those job cuts would be effective beginning on Jan. 17.
Mass layoffs are rare at Amazon, but the company has had rounds of job cuts in 2018 and in 2001 during the dot-com crash. On the warehouse side, the e-commerce giant typically trims its workforce through attrition.
The tech giant CEO said Wednesday that the role eliminations will help the company "pursue our long-term opportunities with a stronger cost structure."
"To those impacted by these reductions, I want you to know how grateful I am for your contributions to Amazon, and the work you have done on behalf of customers," Jassy said. "You have made a meaningful difference in a lot of customers’ lives. To those who will continue on the journey with us, I look forward to partnering with you to keep making life better and easier for customers every day and relentlessly inventing to do so