What Did Amazon Do This Week? - 26-03-2023 [+45 LINKS]
AMAZON SLASHES ANOTHER 9K EMPLOYEES
While all eyes and ears were on TikTok at Congress this week, Amazon decided to save beavers in London…and cut another 9,000 workers. On top of the previous 18,000, Amazon will have cut the equivalent of all the employees at Budweiser. Amazon’s share price dropped 1% on the news.
Andy Jassy put out a memo on the additional cuts. In the memo, he notes the latest round will primarily impact Amazon’s cloud computing, human resources, advertising and Twitch livestreaming businesses. Twitch CEO Dan Clancy said ±400 people would be let go as part of Amazon’s latest round of job cuts and cited Twitch’s user and revenue growth hadn’t “kept pace with our expectations.” One employee, who has suffered three sets of cuts in her department, described the situation as ‘torture’ and, while ‘fortunate enough to keep our jobs have had to absorb an unmanageable amount of work’.
Why two cuts? Per Jassy; “The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we’ve made them so people had the information as soon as possible.”
Amazon is undergoing the largest layoffs in company history after the company over-hired during the last pandemic. The company started with 798,000 at the end of 2019 and grew to more than 1.6 million by the end of 2021. The company is still undergoing assessments (due to be completed mid to late April), so expecting another round of cuts is almost guaranteed. The move may embolden other companies to cut more (see previous issues for why this is not good), and the next round of cuts may be Amazon's deepest yet. Beyond this, morale is the biggest issue. Cuts and especially cuts that drag on, damage the short-term and long-term faith in a company. The cuts don't just cost Amazon now; they'll cost Amazon later in ways the company may not foresee.
The issue, amongst others, is big tech isn't done cutting yet, which keeps a lot of other industries wary, so the economy doesn't bounce back as quickly. Inflation/poor economic outlooks are not entirely on the shoulders of big platforms/tech, but it is fair to say people look to them for stability and signs.
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