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Amazon CEO Andy Jassy said in a memo to employees that most of the layoffs would occur in business units such as Amazon Web Services and Twitch, as well as human resources and advertising divisions. The headcount reductions at the e-commerce and technology behemoth come after approximately 18,000 employees were dismissed at the beginning of the year.
“For several years leading up to this one, most of our businesses added a significant amount of headcount. This made sense given what was happening in our businesses and the economy as a whole,” Jassy told staff members. “However, 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.”
Jassy added that some employees were moved from one initiative to another and that new openings were created even as other positions were entirely eliminated. “The overriding tenet of our annual planning this year,” he continued, “was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole.”
Shares of Amazon fell more than 2% on Monday morning against modest gains in the Dow Jones Industrial Index and the technology-heavy NASDAQ Composite. The company’s stock price has fallen 40% over the past year alongside declines seen by other technology firms.
The headcount reduction comes shortly after social media company Meta dismissed 10,000 employees and ceased efforts to fill 5,000 available positions after decreasing its headcount by more than 11,000 workers earlier this year. The layoffs in Silicon Valley come after entreaties from investors who have noted that inflated payrolls and diminished demand are preeminent factors behind lackluster profits.
Most prominent companies in the sector have reduced headcount as the elevated consumer demand which followed the lockdown-induced recession began to slow. More than 106,000 workers have been dismissed from technology firms so far in 2023, according to a report from Crunchbase, even after companies nixed about 140,000 positions last year.
Companies have also started to end the virtual work policies established amid the lockdown-induced recession. Jassy wrote in another memo that employees must appear in physical office spaces at least thrice per week and that the firm believes “teams tend to find ways to work through hard and complex trade-offs faster” when they are in the same location. Thousands of employees reacted by starting an internal messaging channel intended to challenge the end of fully remote work; four in five members threatened in one informal survey to search for new positions elsewhere because of the policy change.
“It’s easier to learn, model, practice, and strengthen our culture when we’re in the office together most of the time and surrounded by our colleagues,” Jassy continued. “When you’re in-person, people tend to be more engaged, observant, and attuned to what’s happening in the meetings and the cultural clues being communicated.”