Amazon to cut 9,000 more jobs in second round of layoffs

Company will cut roles in the next few weeks, mostly in Amazon Web Services, PXT, advertising and Twitch

Another round of layoffs will affect thousands of staff at Amazon. Bloomberg

Amazon, the world's largest online retailer, is laying off about 9,000 employees, or nearly 3 per cent of its workforce, as technology companies continue to cut jobs amid economic challenges and worries of a global slowdown.

The new layoffs are on top of the previous round that began in November last year and stretched into January. That round affected more than 18,000 Amazon workers.

“Given the uncertain economy in which we reside and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount,” chief executive Andy Jassy said in a letter sent to employees on Monday.

“The overriding tenet of our annual planning this year was to be leaner while doing so, in a way that enables us to still invest robustly in the key long-term customer experiences.”

Andy Jassy, chief executive of Amazon, said 'uncertainty exists in the near future'. Bloomberg

The job cuts, which will be carried out in the next few weeks, will mostly be in Amazon Web Services, PXT (People eXperience and Technology), advertising and Twitch.

The elimination of the roles follows the completion of the company’s second phase of planning this month, it said.

“As our internal businesses evaluated what customers most care about, they made reprioritisation decisions that sometimes led to role reductions, sometimes led to moving people from one initiative to another, and sometimes led to new openings where we don’t have the right skills match from our existing team members,” Mr Jassy said.

However, Amazon will do “limited hiring” in some of its businesses in strategic areas where it has prioritised allocating more resources.

Following the news, the company's stock was down by more than 1.5 per cent to $97.45 a share on Monday. The share price has dropped about 40 per cent in the past year. ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Amazon workers sort and pack items at a warehouse. AFP

“As part of our annual planning process, leaders across the company work with their teams to decide what investments they want to make for the future, prioritising what matters most to customers and the long-term health of our businesses,” Mr Jassy said.

“I believe the result of this year’s planning cycle is a plan that accomplishes this objective. I remain very optimistic about the future and the myriad of opportunities we have.”

Amazon’s net income in the fourth quarter of last year decreased to $300 million, compared with $14.3 billion in the same period of 2021. However, its net sales jumped 9 per cent on an annual basis to $149.2 billion in the previous quarter.

After boosting hiring during the digital boom at the height of the Covid-19 pandemic, technology companies have been laying off workers amid declining earnings and growing fears of a recession in the US.

Microsoft, Alphabet, Facebook’s parent company Meta, Yahoo, Zoom and Spotify are among the companies that have cut thousands of jobs in recent months.

Given the uncertain economy in which we reside and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount

Andy Jassy,
Amazon's chief executive

US employers announced 77,770 job cuts in February, a fivefold increase on an annual basis, Chicago employment company Challenger, Gray & Christmas said.

In the first two months of this year, employers have announced plans to cut 180,713 jobs, the highest January-February total since 2009, the report said.

Technology companies cut the most jobs in February at 21,387, accounting for 28 per cent of total layoffs.

The industry slashed 63,216 jobs in the first two months of 2023, compared with 187 cuts announced in the same period last year, the report added.