The same day Salesforce announced 8,000 layoffs, Amazon announced that its staff cuts will be much deeper than anticipated. In November, the ecommerce giant said they would be laying off 10,000 employees, a small fraction of Amazon’s total global workforce of 1.5 million.  Among those to be laid off are employees in the company’s Devices division, including Alexa, retail, human resources, and books. As of Wednesday, that number jumped to 18,000. That’s the largest number of tech layoffs in this swath of layoffs, says Geekwire.

Shortly after the November announcement, Amazon CEO Andy Jassy said layoffs would continue into the new year as the company completed its annual planning for 2023.

“Yesterday, we communicated the difficult decision to eliminate a number of positions across our Devices and Books businesses, and also announced a voluntary reduction offer for some employees in our People, Experience and Technology (PXT) organization. Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments,” said Jassy.

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Where the additional cuts will be made

Now that a further examination of the company’s workforce needs and the company’s annual planning is complete, Amazon now plans to eliminate an additional 8,000 jobs for a total of just over 18,000 jobs. The majority of the additional job cuts will occur in Amazon Stores and the PXT division, Jassy said. Other impacted departments include ecommerce, AWS, Amazon Prime, and logistics. He had planned to make the announcement later, but a team member leaked the information outside the company, so they tried to get ahead of the news. They plan to communicate with impacted employees starting January 18.

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so. 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,” the CEO said in a January 4, 2023 blog post. “Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year.”

Similar to Salesforce CEO Marc Benioff’s letter to employees also made public Wednesday, Jassy acknowledged the strain this would put on those impacted and said the company will support them with separation payments, transitional health insurance benefits, and external job placement support.

Kindle Publishing for Periodicals shutters in September

Just after Christmas, Publishers Weekly reported that the Kindle Publishing for Periodicals for print and digital and newspaper subscriptions and single-copy sales is shuttering in September 2023. Amazon will notify customers in March, and subscribers will have to purchase their subscriptions elsewhere. Some content may be available on Prime Reading and Kindle Unlimited, but those details have not yet been made public.

These workforce decisions follow closely on the heels of Amazon’s third-quarter results which were released on October 27. Amazon reported net sales of $127.1 billion, a 15% increase year-over-year. However, operating income decreased to $2.5 billion, compared to $4.9 billion in the third quarter of 2021. Net income was $2.9 billion, or $0.28 per diluted share, compared to $3.2 billion or $0.31 per diluted share for the prior year quarter. The fourth quarter, which includes holiday sales, is likely to finish the year strong, but not enough to keep the dam from breaking.

Insider Take

Hits to the tech industry and their staff just keep coming, and they equate to much more than just rightsizing. This is a perfect storm of many factors including the global economy, rising costs, the impact of the war in Ukraine, reducing redundant staff who were hired during the pandemic and are no longer needed, a shift in priorities, and areas for future investment. We’ve seen the same things with Microsoft, Meta, Twitter and Salesforce, though each company has their own unique set of circumstances.