Amazon, the country’s second largest employees, began slowly rolling out layoffs impacting 10,000 employees at the end of 2022. Those layoff started with teams working on the company’s Alexa smart home and Luna cloud gaming segments but evolved to eventually effect 18,000 workers spread out across the company by early January, 2023.
Jassy revealed the mass layoff news in an email to employees shared online titled, “Update from CEO Andy Jassy on role eliminations.” In it, Jassy said he decided to make the additional cuts after meeting with leaders in the company to discuss ways to reduce costs amid a shaky economy and prioritize, “what matters most to customers and the long-term health of our businesses.” The cuts touch several business segments, though Jassy says the majority of the downturn will impact the company’s Stores and PXT organizations.
“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy said. “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.”
In a strange move unique to Amazon, the company reportedly sent a letter to employees back in November offering a “voluntary severance” buyout program if they agreed to leave the company willingly. Employees who agreed to the voluntary severance would receive receive health insurance benefits through the end of December and a weekly stipend over 12 weeks.
Arguably no single company benefited as directly from the pandemic economy as mega retailer Amazon. The company went on a vast hiring spree in 2020 and in the years since has spent at least $5.6 billion acquiring MGM Studios and iRobot. In early October, however, the company showed signs of a slowdown. In an announcement first reported by The New York Times, Amazon said it’s implementing a hiring freeze in its retail business. The company reportedly told its recruiters to close open job positions and cancel a number of recruiting activities. Amazon’s hiring freeze will reportedly stay in effect for the remainder of 2022.
Amazon went on to expand that hiring freeze to all corporate employees in early November. In a memo, Amazon Senior Vice President of People Experience and Technology Beth Galetti cited an uncertain economic outlook and a rise in hiring in recent years as the main drivers behind the slowdown.
“This is not the first time that we’ve faced uncertain and challenging economies in our past,” Galetti wrote. “While we have had several years where we’ve expanded our headcount broadly, there have also been several years where we’ve tightened our belt and were more streamlined in how many people we add.”
Despite the hiring freeze, the memo ended on a seemingly optimistic note. Galetti said they still plan to hire a “meaningful number” of people in 2023. But with the additional cuts announced in the first week of 2023, it’s unclear how that optimism will inevitably play out.