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Thursday, June 8, 2023

Amazon Adds 9,000 More Layoffs in Wave That Has Swept Tech Sector

The most recent layoffs focus on Amazon's extremely lucrative cloud and advertising units

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Sadaf Hasan
Sadaf Hasan
Aspiring reporter covering trending topics

UNITED STATES: On Monday, Amazon said that it would axe an additional 9,000 jobs, adding to a wave of job cuts that have swept the technology industry as an unstable economy pushes businesses to become leaner. In an astonishing turn for a company that has long bragged about its job creation, e-commerce giant Amazon will have cut 27,000 jobs in recent months, or 9% of its approximately 300,000-strong corporate staff.

The most recent layoffs are happening in Amazon’s highly profitable cloud and advertising units, which were once thought to be untouchable until business customers started to be more careful with their spending because of the economy.

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The cuts will also have an impact on Twitch, Amazon’s streaming service. Twitch’s new CEO, Dan Clancy, announced last week that the company would let go of more than 400 workers.

Amazon hopes to have decided by April who will be let go as part of the latest round of layoffs. The business’s stock dropped 1.8%. The decision comes in the wake of a seemingly never-ending stream of layoff news in the technology industry, which has seen some of the most valuable companies in the world, including Microsoft Corp. (MSFT.O) and Alphabet Inc. (GOOGL.O), cut ties with staggering numbers of the workers they once courted in droves.

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“I don’t think this means much for other companies, except that all will be more careful before allowing their headcount to balloon in the future,” said Michael Pachter, a Wedbush Securities analyst.

After eliminating more than 11,000 positions in 2022, Facebook’s parent company, Meta Platforms Inc. (META.O), announced last week that it would eliminate 10,000 employees this year, signalling the start of a second round of layoffs for the industry.

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In a note to staff that was posted online, Andy Jassy, Amazon’s CEO, said that the decision was made because of an ongoing analysis of priorities and economic uncertainty.

“Some may ask why we didn’t announce these role reductions with the ones we announced a couple of months ago. The short answer is that not all of the teams were done with their analyses in the late fall,” the CEO wrote. 

Last month, Amazon said that their operating profit might keep going down in the current quarter because shoppers and cloud users are spending less money.

“None of these layoffs have to happen.” Jassy is choosing to make them happen to pad Amazon’s bottom line,” a labor and activist group that is critical of Amazon, The Athena Coalition, said in a statement.

Some of the company’s services, like its virtual primary care program for employers, have been cut back or stopped in the past few months.

Also Read: Amazon Announces over 18,000 Job Cuts as Major Layoffs Continue into 2023


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