Amazon has announced yet another substantial round of layoffs, as the internet giant today revealed that a further 9,000 people are set to lose their jobs.
In a memo published by CEO Andy Jassy this morning, the company said that the cuts will impact those in its AWS cloud unit, Twitch gaming division, advertising and PXT (experience and technology solutions) arm.
The news comes just a couple of months after Amazon revealed 18,000 layoffs, the majority of which were set to come from its PXT and Amazon Stores businesses. That news itself was an extension on a previous figure that was reportedly in the 10,000-people range, though Amazon never confirmed any figure when that was first reported back in November. At any rate, today’s reveal shines a light on Amazon’s staggered approach to its headcount reduction efforts — something that Jassy addressed in his memo today.
Indeed, Jassy noted that rather than rushing to finish its assessments so they could announce all their redundancies in one fell swoop, they elected to take their time and let people know once each team had mostly completed their analysis. It is worth noting that Amazon is one of the world’s largest employers, with some 1.5 million employees worldwide, roughly seven times that of Google’s parent Alphabet, which laid off some 12,000 workers less than two months ago.
Moreover, Jassy said that they still haven’t concluded the full ins and outs of their cutbacks in terms of establishing which specific roles will disappear.
“Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago,” Jassy wrote. “The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we’ve made them so people had the information as soon as possible. The same is true for this note as the impacted teams are not yet finished making final decisions on precisely which roles will be impacted. Once those decisions have been made (our goal is to have this complete by mid to late April), we will communicate with the impacted employees (or where applicable in Europe, with employee representative bodies).”
Cash cow
On the surface, one of the biggest surprises here is that Amazon’s perennial cash cow AWS has been hit by the layoffs. But while AWS remains in relatively rude health, its growth trajectory of late has not been as precipitous as years gone by, which is reflective of a broader slowdown in cloud infrastructure spending. Put simply, companies are looking to cut costs due to the economic downturn, which translates into fewer dollars spent on things like cloud computing — even though AWS remains a hugely profitable entity for Amazon.
An Amazon spokesperson said that the downsizing of headcount in AWS was due to “re-prioritization decisions” that required it to “reallocate its resources” accordingly.
“In most cases, this involved people shifting projects, priorities, or teams, but in some cases we didn’t have the right skill-match for these priorities,” the spokesperson said. “We continue to be very excited and optimistic about our AWS business, which continues to have very strong pipeline, migration, and fundamentals, even in a challenging economic environment.”*
Microsoft, whose Azure cloud division has been gaining ground on AWS, also announced a major round of layoffs back in January, and this reportedly included some 150 Azure employees, though this hasn’t been independently verified.
While Amazon didn’t previously confirm that AWS was impacted by the round of redundancies it announced back in January, it seems that some of the layoffs were from that unit, as some outlets reported at the time.
So today’s news sees Amazon officially confirm that it’s downsizing what has been one of its biggest moneymakers in recent times. And it’s also the second of the so-called “big 5” tech companies to announce two separate rounds of layoffs, after Facebook’s parent Meta revealed another 10,000 job cuts last week.
*Article updated with additional comment from Amazon.
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