Why You Can Trust CNET Amazon Job Cuts Extend Into 2023, CEO Says
Andy Jassy attributes the layoffs to the "challenging" state of the economy and the rapid hiring of employees in recent years.
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The news comes amid massive layoffs that Amazon initiated earlier this week.
Layoffs and buyouts will continue at Amazon into 2023, the company's CEO, Andy Jassy wrote in a post on Thursday.
Jassy said the job reductions were a part of the company's annual operating planning review. This year's review was complicated by the "challenging spot" the economy is in, coupled with the fact that Amazon rapidly hired employees in recent years, Jassy said.
The e-commerce giant offered "voluntary severance" packages on Tuesday and Wednesday as it continued to enact substantial layoffs across the company, according to CNBC. Human resources and employee services were among the divisions that received the buyout offers.
While Amazon's third-quarter earnings saw improvement over earlier in 2022, overall profits were below expectations. As a result, Amazon had been cutting back in a number of areas even before this week's layoffs and buyouts.
In the past few months, Jassy halted testing on Amazon Scout, the company's robot home delivery initiative. He's also shuttered the Amazon Care tele-health and nursing service, as well as Fabric.com, a long-time online fabric retailer. The cuts, along with high attrition, reduced the headcount at the company by approximately 80,000 between April and September, according to the Times. Amazon imposed a hiring freeze for small teams in September, followed by a corporate-wide freeze earlier this month.
The layoffs at Amazon reflect the turbulence facing the tech industry. Twitter, Microsoft, Meta and Google also have let go of workers in recent months.
Amazon will provide employees who voluntarily leave the company with a severance payment equal to three months of pay, along with one week of salary for every six months of tenure, CNBC reported citing internal documents. The news of buyouts comes amid massive layoffs that the company confirmed in a blog post Wednesday, after days of rumors about job cuts.
"We notified impacted employees yesterday, and will continue to work closely with each individual to provide support, including assisting in finding new roles," Dave Limp, Amazon's senior vice president of devices and services, said in the post. "In cases where employees cannot find a new role within the company, we will support the transition with a package that includes a separation payment, transitional benefits, and external job placement support."
Amazon didn't say how many jobs have been cut, but The New York Times and The Wall Street Journal have reported that the cuts affect around 10,000 corporate employees -- not warehouse workers -- during its busiest time of the year. If that number is accurate, the Times noted that this would be the largest layoff in the company's history.
Limp said that Amazon first mentioned economic issues in July in a company town hall. "After a deep set of reviews, we recently decided to consolidate some teams and programs," he said.
The company declined a request for more information, though it did say that the cuts affected corporate and tech staff, not operations workers.