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Amazon to layoff another 9,000 workers
Amazon.com Inc (AMZN.O) announced another 9,000 job cuts on Monday, adding to a wave of layoffs that has swept the technology sector as an uncertain economy forces companies to become leaner.
Amazon will have cut 27,000 jobs in recent months, or 9% of its roughly 300,000-strong corporate workforce, in a remarkable turn for a company that has long touted its job creation.
The most recent cuts target Amazon’s highly profitable cloud and advertising divisions, which were once thought to be untouchable until economic concerns caused business customers to scrutinize their spending.
Amazon’s streaming unit Twitch will also be affected by the layoffs. Twitch CEO Dan Clancy announced last week that the platform will lay off more than 400 employees.
Amazon hopes to finalize who will be let go in the next round of layoffs by April.
The company’s stock fell 1.8%.
The decision follows a near-endless drumbeat of layoff news in the technology sector that has seen some of the world’s most valuable corporations, among them Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O), sever ties with staggering numbers of employees they once courted in droves.
“I don’t think this means much for other companies, except that all will be more careful before allowing their headcount to balloon in the future,” Wedbush Securities analyst Michael Pachter said.
In what now seems a harbinger, Facebook’s parent Meta Platforms Inc (META.O) said last week it would cut 10,000 jobs this year, kicking off a second round of layoffs for the sector following its elimination of more than 11,000 roles in 2022.
In a note to staff that Amazon posted online, its CEO Andy Jassy said the decision stemmed from an ongoing analysis of priorities and uncertainty about the economy.
“Some may ask why we didn’t announce these role reductions with the ones we announced a couple of months ago,” he wrote. “The short answer is that not all of the teams were done with their analyses in the late fall.”
“Given the uncertain economy in which we reside and the uncertainty that exists shortly, we have chosen to be more streamlined in our costs and headcount.”
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 Athena Coalition, a labor and activist group that is critical of Amazon, said in a statement: “None of these layoffs have to happen. Jassy is choosing to make them happen to pad Amazon’s bottom line.”
The company has scaled back or shut down entire services like its virtual primary care offering for employers in recent months.
