Home/ Companies / News/  Amazon to cut 9,000 jobs in second round of layoffs

Amazon.com Inc. is laying off an additional 9,000 employees, adding to cuts that were already the largest round of firings in the company’s history.

Chief executive officer Andy Jassy announced the cuts internally Monday, saying they would occur in the coming weeks and primarily affect Amazon Web Services, human resources, advertising and the Twitch livestreaming service groups.

“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," he said in his memo, published later to Amazon’s corporate blog.

The e-commerce giant has been laying off mostly corporate workers after a hiring spree during the pandemic left Amazon with too many people.

The company last month wrapped up a round of job cuts that totalled about 18,000 workers. Those layoffs landed heaviest on Amazon’s recruiting and human resources teams, its sprawling retail group and devices teams.

Amazon shares fell 1.7% to $97.29 at 11:25 a.m. in New York. The stock is up about 16% this year.

The cuts come less than a week after Facebook owner Meta Platforms Inc. announced that it was laying off another 10,000 employees and closing about 5,000 additional open roles in its own second major round of job cuts.

Meta chief executive officer Mark Zuckerberg told employees during a recent internal meeting that the economic climate of layoffs and restructuring could last “many years."

Other tech giants have reduced their headcount, including Google parent company Alphabet Inc., Microsoft Corp., Dell Technologies Inc. and International Business Machines Corp.

As of early February, more than 67,000 jobs had been eliminated across the industry since the beginning of the year, according to data compiled by Bloomberg.

“We are not surprised," D.A. Davidson analyst Tom Forte said in a note, pointing to recession concerns as a backdrop to Amazon’s plans.

It’s a continuation of a worrying trend from 2022, when the tech sector announced 97,171 job cuts, up 649% compared with the previous year, according to consulting firm Challenger, Gray & Christmas Inc.

Amazon last month said operating profit may continue to slump in the current quarter, hit by the financial impact of consumers and cloud customers clamping down on spending.

The company has scaled back or shut down entire services like its virtual primary care offering for employers in recent months.

Earlier this month, the company said it would pause construction on its headquarters building in northern Virginia, though the first phase of that project will open this June and welcome 8,000 employees.

Amazon’s workforce—which encompasses warehouse workers as well as corporate roles—doubled to more than 1.6 million people in about two years.But demand slowed as the worst of the pandemic eased—and the company began pausing or cancelling its warehouse expansion plans last year to make sure it doesn’t bleed unnecessary money.

As fears over a potential recession started growing, it also began making other trims in areas. In the past few months, it has shut down a subsidiary that’s been selling fabrics for nearly 30 years and shuttered its hybrid virtual, in-home care service Amazon Care among other cost-cutting moves

Amazon employed 1.54 million people worldwide at the end of December. The vast majority of those workers are hourly employees who pack and ship products in warehouses.

Before the first round of layoffs began in November, the firm had roughly 350,000 corporate employees. Jassy said the latest cuts came after teams completed another phase of the company’s annual planning process.

“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," he said.

Reuters and AP contributed to the story.

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Updated: 21 Mar 2023, 06:24 AM IST
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