Amazon is not done with efforts to reduce its headcount.
The e-tail giant, which recently confirmed it will consolidate some positions in its devices and services organization (responsible for product lines such as Amazon Echo and Kindle devices) and has also offered voluntary reductions for some employees in its people, experience, and technology (PXT) organization, will lay off more employees in early 2023.
In a corporate blog post, Andy Jassy, CEO of Amazon, said there will be more role reductions as its annual planning process continues into early 2023.
“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,” Jassy said in the blog post. “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.”
Jassy said the company will notify affected employees and departments ahead of any public layoff announcements. Amazon will try to place laid off workers in other roles within the company, and provide packages that include a separation payment, transitional health insurance benefits, and external job placement support for employees that cannot be internally placed.
Previous media reports indicated Amazon was preparing to begin eliminating 10,000 corporate and technology roles, starting this week. The jobs that will be cut are said to primarily in the areas of devices, retail, and HR.
Although Amazon has not made a final selection of the exact number of jobs it will eliminate, a reduction of 10,000 workers would represent the largest layoff in company history, totaling less than 1% of the e-tail giant’s total worldwide workforce and about 3% of its corporate staff.
Despite the announcement of impending job cuts, Jassy struck an optimistic tone in the conclusion of the blog post.
“Amazon has weathered uncertainty and difficult economies in the past, and we will continue to do so,” said Jassy. “We have big opportunities ahead, both in our more established businesses like stores, advertising, and Amazon Web Services, 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).”
Amazon takes a corporate hiring break
These layoffs follow a recently announced hiatus in corporate hiring. The company said it still intends to hire a “meaningful number of people” in 2023.
Amazon went on a major hiring spree in Sept. 2021, when it was still achieving record-breaking results from increased online shopping by consumers homebound due to the COVID-19 pandemic. The retailer hired more than 450,000 people in the U.S. between the beginning of the pandemic in March 2020 and September 2021, becoming the largest job creator in the U.S. in the process.
However, the company reported a net loss of $2 billion, or $0.20 per share, for the second quarter ended June 30, 2022, compared with net income of $7.8 billion, or $0.76 per diluted share, in the year-earlier period.
During the second quarter, Amazon reduced its headcount by about 100,000 employees, and at that time Jassy said the company would scale back operations as the sales boom it experienced during the COVID-19 pandemic cooled.