Amazon’s Deeper Cuts Could Impact Retail Outlets
The loss of tech jobs is turning into a full-blown hemorrhage, as Amazon informed workers of another round of upcoming layoffs on Monday, putting another 9,000 employees on the chopping block and bringing the total to more than 27,000 dismissals since November.
According to a memo from chief executive officer Andy Jassy, the latest wave will primarily hit Amazon Web Services, advertising, human resources and Twitch divisions. Amazon Fashion wasn’t specifically mentioned, and an Amazon spokesperson responded to a WWD press request by referring back to the letter.
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Any potential disruption to AWS could be cause for concern to apparel, beauty and any other online retail outlets that rely on Amazon’s cloud division. It’s the top cloud computing platform by market share, at 34 percent, and it fuels a massive load of e-commerce with artificial intelligence and machine learning powers.
Jassy made it clear that AWS is still a priority at the company and, naturally, he positioned the move as one of efficiency. “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 wrote. “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.”
He went on to explain the strategic thinking: Amazon is going leaner, so it can still invest in long-term experiences that will help both consumers and the company. After conducting an internal evaluation to home in on what customers care about most, executives reshuffled priorities and people to line up, he said. That effort led to role reductions, shifting staff to different projects and even new openings where existing workers didn’t have certain necessary skills.
Those changes have created a seismic employment shift at Amazon. The first wave sheared 18,000 jobs, as the company announced in January, and now, “as we completed the second phase of our planning this month, it led us to these additional 9,000 role reductions,” said Jassy. But don’t be surprised when new Amazon job listings pop up here and there. He noted that there will be some limited hiring in a few strategic areas with more resources allocated.
The additional cuts weren’t part of the earlier layoffs because some teams hadn’t finished their analyses in time, and there’s still more to do even now. The affected teams haven’t decided exactly which roles will be impacted yet, but aims to finalize those decisions by mid to late April.
Laid-off employees will receive packages, including a separation payment, transitional health insurance benefits and help to find another job.
Tech employers have been facing a new reality over the past year, as record pandemic gains dwindle fast in the face of inflation, falling online advertising, supply chain issues and more. Google cut 12,000 workers; Microsoft shed 10,000, and although Apple has managed to keep its pink slips in the drawer, the iPhone maker has been making rare moves to cut costs by delaying bonuses and projects. Others, like Snapchat, Twitter and Meta, don’t have the same $165 billion war chest, so they’re forced to shear off workers.
Meta, in particular, stands out. With announcements warning of upcoming cuts, the job losses will extend across two rounds that will amount to some 21,000 employees. This week, Meta’s CEO Mark Zuckerberg sat in the hot seat during a town hall, as staff questioned what was coming and why. Meanwhile, Meta has been rejiggering its priorities, pulling back on high-profile efforts like NFTs and livestream shopping, in an effort to navigate an uncertain scenario.
According to Zuckerberg, it must grapple with the possibility “this new economic reality will continue for many years.”
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