As part of a previously disclosed workforce reduction, Amazon.com Inc. will now be eliminating more than 18,000 employees, according to Chief Executive Andy Jassy in a public staff letter on Wednesday.
The company’s e-commerce and human resources departments will be the most affected by the layoff choices, which Amazon will announce starting on January 18, he added.
The reductions, which reflect a quick flip for a retailer that recently quadrupled its base pay threshold to compete more fiercely for talent, account for 6% of Amazon’s approximately 300,000-person corporate workforce.
Annual planning ” has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years,” Jassy wrote in the note.
Following Walmart Inc. (WMT.N), Amazon is the second-largest private employer in America with more than 1.5 million employees, including warehouse staff. As rising inflation drove firms and consumers to cut back on spending and as its share price fell by half in the previous year, it has prepared for expected slower growth.
It started laying off employees from its devices section in November, with sources claiming at the time that it was aiming to cut down 10,000 jobs.
In a blog post, Amazon CEO Andy Jassy wrote that the staff reductions were set off by the uncertain economy and the company's rapid hiring over the last several years.
The cuts will primarily hit the company's corporate workforce and will not affect hourly warehouse workers. In November, Amazon had reportedly been planning to lay off around 10,000 employees but on Wednesday, Jassy pegged the number of jobs to be shed by the company to be higher than that, as he put it, "just over 18,000."
Jassy tried to strike an optimistic note in the Wednesday blog post announcing the massive staff reduction, writing: "Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so."
While 18,000 is a large number of jobs, it's just a little more than 1% of the 1.5 million workers Amazon employees in warehouses and corporate offices.
Last year, Amazon was the latest Big Tech company to watch growth slow down from its pandemic-era tear, just as inflation being at a 40-year high crimped sales.
News of Amazon's cuts came the same day business software giant Salesforce announced its own round of layoffs, eliminating 10% of its workforce, or about 8,000 jobs.
Salesforce Co-CEO Mark Benioff attributed the scaling back to a now oft-repeated line in Silicon Valley: The pandemic's boom times made the company hire overzealously. And now that the there has been a pullback in corporate spending, the focus is on cutting costs.
"As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we're now facing," Benioff wrote in a note to staff.
Facebook owner Meta, as well as Twitter, Snap and Vimeo, have all announced major staff reductions in recent months, a remarkable reversal for an industry that has experienced gangbusters growth for more than a decade.
For Amazon, the pandemic was an enormous boon to its bottom line, with online sales skyrocketing as people avoided in-store shopping and the need for cloud storage exploded with more businesses and governments moving operations online. And that, in turn, led Amazon to go on a hiring spree, adding hundreds of thousands of jobs over the past several years.
The layoffs at Amazon were first reported on Tuesday by the Wall Street Journal.
CEO Jassy, in his blog post, acknowledged that while the company's hiring went too far, the company intends to help cushion the blow for laid off workers.
"We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support," Jassy said.
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