Amazon has announced it will cut 9000 more jobs in its cloud-computing unit, AWS, PXT, advertising, and Twitch. This order comes after the company laid off over 18,000 employees in November 2022, which extended to January 2023. The layoffs are part of the company’s efforts to streamline its costs and headcount, given the uncertain economic conditions in the market.
Why Didn’t Amazon Announce These Layoffs Earlier?
Amazon CEO Andy Jassy stated that the company did not announce these layoffs earlier because not all teams had completed their analyses in the late fall. He added that the company shared these decisions as soon as possible rather than rush through assessments without appropriate diligence.
Annual Planning Process Led to More Job Cuts
According to Jassy, the 2nd phase of the company’s annual planning process, completed this month, led to additional job cuts. However, the company will still hire in some strategic areas. The overriding tenet of the annual planning was to be leaner while investing robustly in long-term customer experiences that can improve customers’ lives and Amazon.
Cloud Computing Customers Looking to Save Costs
According to IDC analyst Rick Villars, the job cuts in Amazon’s cloud-computing unit come as cloud customers have looked to save money on setup and software costs. Although new growth opportunities for cloud companies, such as in artificial intelligence, are emerging, they have yet to make a significant impact. As one of the biggest and largest players in the cloud arena, the layoffs will likely be visible in the company’s numbers, Mr. Villars said.
Tech Firms Cutting Jobs Due to Uncertain Economic Conditions
Amazon is one of many tech firms cutting jobs due to uncertain economic situations in big markets such as the US and adjusting their cost bases after exploring too much during the coronavirus pandemic. Tech companies laid off more than 150,000 workers globally last year, with a further 139,000 layoffs already announced in 2023, including Amazon’s latest announcement.
Final Thoughts
While the layoffs are undoubtedly a challenging decision for Amazone, the company’s focus on streamlining its costs and headcount will enable it to invest more in long-term customer experiences. It remains to be seen how the layoffs will affect Amazon’s overall performance, given the current economic conditions and the intense competition in the market.
