Amazon culls another 9,000 jobs

Just months after announcing a huge round of layoffs, US hyperscaler Amazon is preparing to wield the axe once again.

The company announced on Monday that another 9,000 staff will be shown the door. This time around the cuts will be made at Amazon Web Services (AWS), Advertising, and its Twitch streaming service. Further cuts are also being made to the People, Experience, and Technology (PXT) unit, which is essentially Amazon’s HR department.

“As we’ve just concluded the second phase of our operating plan (‘OP2’) this past week, I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks – mostly in AWS, PXT, Advertising, and Twitch. This was a difficult decision, but one that we think is best for the company long term,” said Amazon CEO Andy Jassy, in a memo to staff.

“For several years leading up to this one, most of our businesses added a significant amount of headcount. This made sense given what was happening in our businesses and the economy as a whole,” he continued. “However, given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”

It only takes a quick glance at Amazon’s most recent results to see the problem. Revenue for 2022 increased to almost $514 billion from $470 billion, the growth driven by sales of services. But operating costs were also up, by 12.8% to $501.7 billion. As a result, Amazon’s operating income fell by more than 50% in 2022 to $12.2 billion.

Faced with a combination of rising costs and economic uncertainty, Amazon decided something had to give.

In January, Jassy confirmed that 18,000 positions would be eliminated, which included the unspecified number of redundancies that Amazon announced back in November last year. Here we are in March, and Amazon is already wielding the axe again.

“The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole,” Jassy said on Monday.

Amazon’s announcement comes less than a week after Meta made a similar one of its own. In an update about his company’s so-called ‘Year of Efficiency’, CEO Mark Zuckerberg said the efficient thing to do would be to get rid of another 10,000 employees. That was in addition to the 11,000 who were given the elbow in November.

Amazon and Meta are by no means the only big tech cos doing this; Microsoft and Google have been at it as well. In fact, the scale of the cutbacks in the tech sector is such that there is now a dedicated Website, Layoffs.fyi, that tries to keep track of them all in real time. It calculates that last year, 1,051 tech companies axed a combined 161,411 staff. Less than three months into 2023, and so far 505 companies have shed 148,180 jobs.

With both Amazon and Meta announcing additional redundancies, and the increasing rate at which tech sector workers are being culled, it is probably a case of when there is another big job cut announcement, not if.

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