We now have confirmation from Amazon with a memo from the CEO to staff that they will cut over 18000 jobs as mentioned, much more than expected before the end of the year.
There was an indication that around 10,000 jobs would be cut, but this is much more than expected and therefore signals to many that this is a more recent sign, the tech slump deepening the cuts. Again, we are told in the CEO’s memo that he will be primarily in the corporate ranks, the retail division, and human resources. We are also told that affected employees will be laid off starting January 18.
And then various topics such as severance pay and help finding other jobs will be discussed. CEO Andy Jaffe, also ISE, said in a memo that this is part of the company’s annual planning process. He cites, Amazon is weathered, uncertain and difficult economies in the past. He said they will continue to do that and quoted:
These changes will help you pursue our long-term opportunities with a more robust cost structure. Costs reduction. Really the name of the game for so many companies as we head into 2023, this is the biggest tech cut we’ve ever seen in Silicon Valley. And if you put it in Bloomberg, you can see that it’s mainly because the company employs so much ISE staff in total about one and a half million since last year.
And this is also a company that admitted it, hired, hired way too many people during the pandemic when their stock really took off. But over the past year, the stock has come under considerable pressure with a sharp slowdown in e-commerce growth and several headwinds and concerns about a recession.
We should also note that the memo rebuked certain staff members who may have leaked the news before the memo could go out. The Wall Street Journal ran an earlier story that sent shares up about 2 percent after hours, an indication that Wall Street investors may be very receptive to this sign of further cost cutting instead or at consideration of the much more difficult times ahead.