Story updated with comments from Amazon CEO Andy Jassy.
Follow-up: The end of ‘everything’ at Amazon: Record layoffs signal new mindset for sprawling tech giant
Original story: Amazon’s cuts into its corporate and tech ranks will affect more than 18,000 employees, the tech giant confirmed Wednesday, several weeks after layoffs first began in November.
In a memo to employees posted to Amazon’s blog Wednesday, CEO Andy Jassy for the first time announced the number of layoffs the company is making as it aims to trim expenses amid uncertain macroeconomic conditions.
A majority of the cuts affect Amazon Stores (the company’s retail arm) and People, Experience, and Technology (its HR arm), Jassy said in the memo. The cuts are the largest in Amazon’s 28-year history.
“These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles,” Jassy told employees.
Jassy previously addressed the cuts in November, stating that layoffs would continue into 2023.
A report from The New York Times in November pegged the expected number of cuts at around 10,000 people, although Amazon never gave a specific target. The Wall Street Journal first reported about the larger number earlier Wednesday.
The Journal noted that the 18,000 figure would represent the largest layoffs revealed so far during a wave of cutbacks at major tech companies.
Amazon previously told employees that it would freeze corporate hiring, and the layoffs match moves made by Meta, Twitter, Lyft, Redfin, Convoy, Stripe, Flyhomes and many more companies looking for ways to cut costs amid a slowing economy. Salesforce on Wednesday said it was slashing 10% of its workforce.
Amazon CFO Brian Olsavsky told analysts on Amazon’s most recent earnings call that the company was preparing for “what could be a slower growth period” due to increased foreign currency headwinds, global inflation, fuel prices, and rising energy costs.
Amazon went on a hiring spree during the pandemic to help meet demand as more people shopped online. The company employs 75,000 people in the Seattle region, many of them corporate and tech workers, as part of its workforce of 1.54 million people around the world, including warehouse workers who would not be impacted by the latest cuts.
Amazon met expectations for third quarter revenue, reporting $127.1 billion, up 15% year-over-year. It reported a net income of $2.9 billion, or $0.28 per share, which beat expectations.
But its fourth quarter guidance came in lower than expected at $140 to $148 billion, compared to estimates of $155 billion. Operating income is expected to be between $0 and $4 billion, a wide range that demonstrates the broader economic uncertainty.
