Amazon is cutting a massive 18,000 jobs in 'uncertain' economy

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Amazon CEO Andy Jassy.

Amazon CEO Andy Jassy has announced plans to cut just over 18,000 roles. 

Last November, Amazon announced plans to cut roles in its devices and books businesses and halted new corporate hiring. The majority of the latest job cuts, said Jassy, are in Amazon Stores and its People, Experience, and Technology organization. The cuts follow a period of rapid hiring over the last few years. Affected employees worldwide will be notified on January 18, according to Jassy. 

“We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted. 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. We intend on communicating with impacted employees (or where applicable in Europe, with employee representative bodies) starting on January 18,” he wrote.

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The Wall Street Journal reported Amazon’s layoffs ahead of its announcement, noting the job cuts represent about 1.2% of its 1.5 million employees as of September, and 5% of its corporate workforce.

Also: Hiring or firing? Why job cuts at big tech don’t always show the full picture

Jassy, who took over as Amazon chief from Jeff Bezos in July 2021, said the company will be “inventive, resourceful, and scrappy” as it navigates uncertain economic times when it’s not hiring as fast as it used to and cutting some roles. 

“Companies that last a long time go through different phases,” he said in a staff memo published on the company’s blog

“They’re not in heavy people expansion mode every year. We often talk about our leadership principle Invent and Simplify in the context of creating new products and features. There will continue to be plenty of this across all of the businesses we’re pursuing. But, we sometimes overlook the importance of the critical invention, problem-solving, and simplification that go into figuring out what matters most to customers (and the business), adjusting where we spend our resources and time, and finding a way to do more for customers at a lower cost (passing on savings to customers in the process). Both of these types of Invent and Simplify really matter.” 

2023 begins where 2022 left off, with tech companies adjusting plans for hiring and new projects after experiencing a boom at the outset of the pandemic, followed by global supply chain woes, higher inflation, higher interest rates, and recession fears. 

Also: Hybrid working tips: 5 ways to beat the mid-afternoon slump

News of Amazon’s job cuts came just after Salesforce announced plans to cut its worldwide headcount by about 10%, affecting around 8,000 employees, as well as plans to commence office space reductions in some markets. Salesforce notified affected employees by email on Wednesday.

Salesforce chief Marc Benioff said in a letter to employees that the company hired too many people during the pandemic. Salesforce expects to incur charges of between $1.4 billion to $2.1 billion related to employee and office space reductions. Between $1 billion to $1.4 billion of charges are related to employee transition, severance payments, employee benefits, and share-based compensation. Between $450 million to $650 million of charges are related to office space reductions. 

“The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks,” Salesforce chief Marc Benioff said in a letter to employees. 

“I’ve been thinking a lot about how we came to this moment. As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”

Affected US employees will receive nearly five months of pay, health insurance, and support finding new jobs. Benioff noted that non-US employees will receive a similar level of support in line with local laws.