Jassy said that in addition to economic uncertainty, another factor contributing to the layoffs was Amazon’s rapid hiring, which it has undertaken in recent years to meet increased demand during the pandemic.
The hiring surge comes after the retail giant’s revenue fell in the third quarter. Amazon reported net income fell to $2.9 billion, or 28 cents per diluted share, in the quarter that ended Sept. 30, compared with $3.2 billion, or 31 cents per diluted share, in the third quarter of 2021. Operating income fell to $2.5 billion, compared with $4.9 billion a year earlier. The North American segment had an operating loss of $400 million compared with an operating profit of $900 million a year earlier.
“We want to find the right balance between making long-term investments for our customers, improving operational efficiency, and doing more with less,” Brian Olsavsky, Amazon’s senior vice president and chief financial officer, said on the company’s third-quarter earnings call.
In November 2022, Amazon eliminated several jobs in its devices and books divisions and announced voluntary pay cuts for some employees in its PXT organization. At the time, Jassy warned of further job cuts in early 2023.
“These changes will help us pursue long-term opportunities with a stronger cost structure; however, I am also optimistic that unless we hire big names and cut some roles, we will be creative, imaginative and scrappy during this time,” Jassy wrote in his Jan. 4 message. “Long-term companies go through different phases. They’re not in blockbuster mode every year.”
Amazon has not notified employees affected by the latest round of layoffs.
“Typically, we wait to communicate these findings until we can speak to those directly affected,” Jassy wrote. “However, since one of our teammates shared this information externally, we decided it was best to share this news sooner so you can hear the details directly from me.”
Affected employees will be notified by January 18.
Jassy noted that the company will work to support those affected by providing a package that includes separation pay, transitional health insurance benefits and outside job placement assistance.
