Amazon Lays Off Another 9K Workers

Facts

• Amazon on Monday announced it will lay off another 9K employees in the coming weeks, mostly in its advertising and cloud computing divisions — just two months after it terminated 18K people.¹
• In his memo to staff, CEO Andy Jassy cited the current economy as well as 'uncertainty that exists in the near future” for the layoffs. He added, 'we have chosen to be more streamlined in our costs and headcount.'²
• Amazon's streaming platform Twitch will also be impacted by the layoffs, with more than 400 jobs expected to be lost.³
• Jassy is also conducting a broad overview of the company's expenses amid an economic downturn and slowing growth in its core retail business. Amazon has also frozen hiring, terminated experimental projects, and stalled warehouse growth.²
• Amazon last year had planned on terminating 10k positions, but later bumped it to almost double that figure, mostly for its PXT employees, Amazon Devices, Amazon Books, and the closure of Amazon Stores. Growth of its Amazon Fresh grocery store chain has also stalled.⁴
• Amazon’s layoffs come while Facebook parent company Meta plans on laying off roughly 12% of its nearly 87K employees, SiriusXM CEO announced it will be firing about 8% of its nearly 6K employees, and other companies have announced cutbacks in recent weeks.⁵

Sources: ¹BBC News, ²CNBC, ³Reuters, ⁴Winsight grocery business and ⁵Forbes.

Narratives

• Narrative A, as provided by Forbes. These companies have no choice but to downsize. The pandemic tech boom allowed companies to increase their workforces by as much as 200%, but the economy has since turned for the worse. With the US Federal Reserve reacting to inflation by hiking interest rates, there’s less available venture capital, and digital-ad revenue has dipped.
• Narrative B, as provided by Harvard business review. Instead of layoffs, which are an old-school way of dealing with a recession, companies should find alternative strategies because social media has made everyone a workers' rights activist with a global microphone. Companies that conduct layoffs suffer from poor optics, the cost of restructuring, and the low morale they create — leading them to perform poorly.