Andy Jassy, CEO of Amazon Web Services.
- Amazon, one of the largest employers in the U.S., is scaling back more than it had anticipated.
- Andy Jassy, Amazon’s CEO, said an employee leaked the plans, prompting him to make a public announcement.
- "Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so," Jassy wrote in a memo.
Amazon said Wednesday it will cut more than 18,000 jobs, a bigger number than the e-retailer initially said it would be eliminating last year.
The Wall Street Journal reported on the cuts earlier, which Amazon said preempted its planned announcement.
"We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted," CEO Andy Jassy wrote in a memo to employees that the company published on its blog. "However, because one of our teammates leaked this information externally, we decided it was better to share this news earlier so you can hear the details directly from me."
Tech companies are picking up in 2023 where they left off last year, preparing for an extended economic downturn. Salesforce said Wednesday it would reduce head count by 10%, impacting more than 7,000 employees. Both Amazon and Salesforce admitted they hired too rapidly during the Covid pandemic.
Amazon specifically acknowledged that it had added workers too quickly in warehouses as consumers shifted to online ordering. The company employed 1.54 million people at the end of the third quarter.
In November, Jassy said Amazon would eliminate roles, including at its physical stores and in its devices and books divisions. CNBC reported at the time that Amazon was looking to lay off around 10,000 of its employees. Now the number is higher.
Money Report
"Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so," Jassy wrote. "These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I'm also optimistic that we'll be inventive, resourceful, and scrappy in this time when we're not hiring expansively and eliminating some roles."
Amazon plans to inform employees who will lose their jobs starting Jan. 18, Jassy wrote, noting that most cuts will come in the stores and People, Experience, and Technology (PXT) groups.
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