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Amazon is reducing costs and headcounts, considering the “uncertainty that exists in the near future” and the unstable economy.
E-commerce giant Amazon (NASDAQ: AMZN) has announced the additional layoff of 9,000 workers extending its recent record job cuts. The company announced in January that it would dismiss some staff, no less than 18,000. Amazon noted that it is making the decision as a result of the global economic situation. Ahead of this additional layoff, Amazon dismissed over 18,000 people between November and January. Specifically, e-commerce and human resources department workers were projected to be most affected.
Amazon Announces Additional Job Cuts Following Previous Layoff
Most recently, Amazon CEO Andy Jassy said on 20th March that additional employees would be forced to leave the company in the coming weeks. According to the Memo, the job cuts will majorly affect workers in Amazon Web Services, PXT, Advertising, and Twitch. While Jassy said it was difficult to decide, he added that it is best for the company long-term.
In the published memo, the CEO said Amazon made massive recruitment while the economy and business boomed. Indeed, the company went on a hiring spree during the coronavirus pandemic. As of the end of 2021, Amazon’s global workforce was more than 1.6 million. Meanwhile, it has about 798,000 employees as of Q4 2019.
However, the company is reducing costs and headcounts, considering the “uncertainty that exists in the near future” and the unstable economy. The retail giant wants to invest “robustly” in long-term consumer experiences beneficial to both customers and the company. The Amazon executive said their additional layoff did not come earlier as some teams were not done with the annual analysis until recently. The company had to wait for the reports before making its decision.
“If I go back to our tenet-being 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 customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole – I believe the rest of this year’ planning cycle is a plan that accomplishes this objective. I remain very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, Stores and AWS, and our newer customer experiences and businesses in which we’re investing.”
Also, Amazon will contact impacted employees about being victims of the additional layoff. According to Twitch CEO Dan Clancy, about 400 people would be fired in the extended headcount reduction. Clancy explained that Twitch’s users and revenue growth have not been up to expectations.
Amazon stock is down 0.28% to $97.44 in after-hours trading. AMZN has lost 39.50% in the last twelve months.