Amazon confirms corporate staff cuts that could hit 10,000 employees | Mint

Amazon confirms corporate staff cuts that could hit 10,000 employees

Amazon headquarters in downtown Seattle. (AP)
Amazon headquarters in downtown Seattle. (AP)

Summary

CEO Andy Jassy is leading companywide cost-cutting review

Amazon.com Inc. is trimming its corporate ranks, in a rare round of cuts for a tech giant that has mostly seen consistent growth throughout its history.

The company said Wednesday that it is shedding workers as part of efforts to control costs. Amazon could cut about 10,000 jobs, including in its retail, devices and human-resources divisions, a person familiar with the matter said, who also noted that the final number could change. The cuts would affect roughly 3% of its corporate staff and don’t appear likely to affect its hundreds of thousands of warehouse workers.

“Given the current macroeconomic environment (as well as several years of rapid hiring), some teams are making adjustments, which in some cases means certain roles are no longer necessary," a spokesman said Wednesday. “We don’t take these decisions lightly, and we are working to support any employees who may be affected."

Amazon also extended voluntary buyout offers to some employees, including those in human resources, according to people familiar with the matter.

Dave Limp, Amazon’s senior vice president of devices and services, said in a message to employees that his staff notified affected employees on Tuesday and were working to help them find new jobs. For employees who can’t find a new internal role, Amazon is providing severance that includes a separation payment, transitional benefits and external job-placement support, Mr. Limp said.

Employees whose jobs were eliminated are slated to receive pay for the next two months at their current level with benefits, some employees said. People who don’t find a new role at Amazon are slated to receive one week of pay for every six months worked in some cases, the employees said. Employees would get a minimum severance of four weeks of pay and a maximum of 20 weeks.

On Tuesday night, Amazon offered three months’ salary, plus severance, to some employees on its human-resources team to voluntarily leave the company, according to an email viewed by The Wall Street Journal. Employees have until Nov. 29 to accept the buyout offer.

Amazon didn’t publicly provide details of its severance packages.

Among teams that were targets for cutbacks this week were employees in Amazon’s Luna cloud-gaming service, Alexa marketing, Alexa AI and Alexa Privacy, according to employees. Amazon also made cuts to its consumer product-development arm named Lab126, an area of the company where Amazon has tested out new innovations.

“While I know this news is tough to digest, I do want to emphasize that the Devices & Services organization remains an important area of investment for Amazon," Mr. Limp said in the message.

Before Wednesday’s announcement, some employees said they were frustrated by the lack of communication by senior management, saying they had initially learned of the layoffs through the news media. An Amazon spokesman declined to comment.

Chief Executive Andy Jassy, as part of a business review, has targeted unprofitable teams and projects at the company. Amazon’s devices business has been one focus. The unit, which has long been headlined by the Alexa smart-assistant brand, has lost more than $5 billion annually in some recent years.

The devices business, which began with products such as the popular Kindle e-reader, in recent years has become a prominent department employing more than 10,000 staff members. It has produced numerous popular devices such as the Echo smart speaker as well as others that haven’t always translated into consumer hits, including a smart finger ring and a video-calling device for children.

Amazon’s move to cut its workforce followed earlier decisions to slash teams in retail, robotics and elsewhere and to pare back on hiring. Earlier this month, Amazon froze hiring across its corporate ranks.

Job cuts are rare at Amazon. With more than 1.5 million employees throughout the world, the company has typically avoided such moves by being able to shift employees and resources around when needed. Amazon naturally sheds workers at times through attrition or by managing out low-performing employees. The company had a round of layoffs in 2000 through a reorganization, when its workforce was much smaller.

Mr. Jassy became CEO in 2021 as Amazon began to transition from a period of tremendous growth driven by Covid-19 to one of slower sales as consumer shopping patterns shifted back to prepandemic trends. Mr. Jassy has responded this year by pulling back on Amazon’s facility expansions and targeting costs. Chief Financial Officer Brian Olsavsky last month said the company would be careful in how it hires in the near future.

Amazon is among many tech companies that have moved to cut staffing levels amid a slowdown in business. Meta Platforms Inc., Lyft Inc. and Alphabet Inc.’s Google are among other companies looking at or enacting cuts.

Many companies have shared similar problems. They grew quickly during the earlier months of the pandemic, overexpanded, and now are looking at ways to reduce costs.

 

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