Amazon’s CEO, Andy Jassy, announced in a staff memo on Monday that the company plans to cut 9,000 jobs in the coming weeks in New York. This marks the second largest round of layoffs in the company’s history, following the announcement in January that 18,000 employees would be laid off. Despite doubling its workforce during the pandemic, like many companies in the tech sector, Amazon is now trimming areas of the business as part of its annual planning process. Jassy stated that the company will still be hiring in certain strategic areas.
Jassy explained that some may question why the latest round of job cuts was not announced alongside the previous ones a couple of months ago. He clarified that not all teams had completed their analyses during the late fall, and rather than rushing the process without due diligence, the company decided to share the decisions as soon as they were made.
This time, the job cuts will affect profitable areas of the company, including its cloud computing unit AWS, its growing advertising business, Twitch, the gaming platform owned by Amazon, and the company’s PXT organizations responsible for human resources and other functions.
The previous layoffs had impacted Amazon’s stores division, which includes its e-commerce business, brick-and-mortar stores like Amazon Fresh and Amazon Go, and departments such as the one managing the virtual assistant Alexa.
Amazon has also been cutting back on other areas, such as announcing earlier this month that it would temporarily halt construction on its headquarters building in northern Virginia, although the first phase of the project is still set to open in June and will employ 8,000 people.
Similar to other tech giants like Meta (formerly Facebook) and Alphabet (parent company of Google), Amazon increased its hiring during the pandemic to meet the surge in demand from consumers who were confined to their homes and turned to online shopping for safety.
Over the course of about two years, the company’s workforce, which includes both warehouse workers and corporate roles, doubled to over 1.6 million people.
However, as the pandemic subsided, the demand for online shopping slowed down, prompting Amazon to pause or cancel its warehouse expansion plans to avoid unnecessary financial losses. With the looming threat of a recession, the company also made cuts in other areas.
In recent months, it closed down a subsidiary that had been selling fabrics for almost 30 years and ended its hybrid virtual and in-home care service, Amazon Care, among other cost-cutting measures. (AP)
