Last week, Amazon started their latest round of layoffs, impacting approximately 9,000 employees. This will bring their total layoff count to about 27,000, representing 8% of the company’s corporate workforce. This round includes employees from Amazon Web Services, Human Resources (referred to as PXT – People, Experience and Technology), Amazon Advertising and Twitch, reports GeekWire.

Amazon CEO Andy Jassy announced this round of layoffs – the company’s third since November – in an email to employees in March. The message was also posted to Amazon’s blog.

“Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount. The overriding tenet of our annual planning this year was to be 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 customers’ lives and Amazon as a whole,” Jassy said in a message to employees that was posted to Amazon’s blog.

This round of layoffs is in addition to previously announced layoffs and the shuttering of programs that don’t align with Amazon’s current priorities. Programs that have been shut down include Amazon Care primary healthcare business, Amazon Fabric, physical stores like Amazon Go and Amazon bookstores, and Kindle Publishing for Periodicals. Other notable changes include fees for Amazon Fresh deliveries under $150 and return fees for some Amazon returns made at UPS stores.

AWS chief Adam Selipsky sent a message, shared by GeekWire, to his team to notify them of the layoffs. He also said that Amazon would provide departing employees with compensation packages that include separation payments, transitional health insurance benefits, and external job placement support.

“Both the size of our business and the size of our team have grown significantly over recent years, driven by customer demand for the cloud and for the unique value AWS provides. This growth has come quickly as we’ve moved as fast as we could to build what customers have needed. Given this rapid growth, as well as the overall business and macroeconomic climate, it is critical that we focus on identifying and putting our resources behind our top priorities—those things that matter most to customers and that will move the needle for our business. In many cases this means team members are shifting the projects, initiatives or teams on which they work; however, in other cases it has resulted in these role eliminations,” wrote Selipsky.

PXT head Beth Galetti also sent a message to her team.

“As Andy shared a few weeks ago, leaders across the company have worked closely with their teams to decide what investments they are going to make for the future, prioritizing what matters most to customers and the long-term health of our businesses. Given PXT’s close partnership with the business, these shifts impact our OP2 plans as well, and we have made the difficult decision to eliminate additional roles within the PXT organization,” Galetti wrote. “While this moment is hard, I remain energized by the important work that lies ahead of us. Together, we are building a workplace that helps fuel how Amazonians invent and deliver for customers.”

Amazon first quarter results

The day after notifications began, Amazon posted its first quarter results. Financial highlights from that report include the following:

• Net sales were $127.4 billion, a 9% increase year-over-year.
• Operating income was $4.8 billion, compared to $3.7 billion in the first quarter of 2022.
• Net income was $3.2 billion, or $0.31 diluted earnings per share, compared to a net loss of $3.8 billion, or $(0.38) diluted earnings per share for the first quarter last year.

In his comments in the April 27, 2023 news release, Jassy shared his optimism for the company’s future, including areas they have cut or reprioritized – Stores, Advertising and AWS.

“There’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy,” Jassy said.

Insider Take

Amazon is laying off tens of thousands of employees, and no matter how “optimistic” company leaders are, those job losses and the shuttering of programs have to hurt. We understand that the company needs to “right-size” or scale back down after the pandemic, but there is a lot more going on here than employee layoffs. The company is making major changes to programs and strategies, and all the details are hard to track. Perhaps that’s what Amazon hopes for – that we will be so busy trying to understand the changes that we won’t notice that the big picture isn’t as rosy as it appears. Time will tell how these job losses and program changes will impact the company.