Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.
David Paul Morris | bloomberg | Getty Images
On Wednesday, Amazon began laying off some employees in its cloud computing and human resources departments.
Amazon Web Services CEO Adam Celebski and Chief Human Resources Officer Beth Galetti sent notes to employees in the United States, Canada and Costa Rica informing them of the job cuts.
“It’s a tough day for our organization,” Silepski wrote in the memo.
The layoffs are part of previously announced cuts that are expected to affect 9,000 employees. Last week, Amazon laid off some employees in its advertising unit, and it has shed employees in its video game and Twitch live-streaming units in recent weeks.
Amazon ended a separate round of cutbacks earlier this year that affected nearly 18,000 employees. Combined with the cuts this month, they mark the largest layoffs in Amazon’s 29-year history.
Amazon CEO Andy Jassy has aggressively cut costs across the company as the e-retailer believes the economic downturn and slowing growth in its core retail business. Amazon has frozen hiring for its workforce at the company, canceled some pilot projects and slowed warehouse expansion.
By announcing layoffs in advertising and AWS, Jassy showed that two of Amazon’s largest and most profitable companies aren’t immune to cost cuts. Both AWS and advertising have seen growth slow in recent months as companies cut back on spending amid a challenging economic environment.
Some teams within AWS were included in the previous round of layoffs. Part of the cuts are expected Wednesday to reach AWS’ professional services division, which helps customers troubleshoot issues with cloud infrastructure, according to a current employee, who asked not to be identified because he was not authorized to speak on the matter. .
AWS’s headcount swelled during the pandemic, which has proven to be a huge boon for Amazon and other cloud service providers, as businesses, government agencies, and schools accelerate their transition to the cloud.
“Given such rapid growth, as well as the overall business climate and macroeconomics, it is critical that we focus and place our resources behind our top priorities — those things that matter most to customers and that will move the needle of our business,” Selipsky wrote in the note. “In many cases, this has meant that team members change projects, initiatives, or teams in which they work; however, in other cases, it has resulted in these roles being eliminated.”
Amazon will report first-quarter earnings after the bell on Thursday. Investors will be looking for any insight into whether Jassy’s cost-cutting efforts have improved profitability, and when Amazon executives can expect AWS’ growth to accelerate.
Amazon shares were up 3.2% in mid-morning trading Wednesday.
Here’s the full note from Selipsky:
AWS Team,
As you know, we recently made the difficult decision to eliminate some roles across Amazon globally, including within AWS. I wanted to let you know that conversations with affected AWS employees started today, with notification letters sent out to all affected employees in the United States, Canada, and Costa Rica. In other areas, we follow local processes, which may include time to consult with employee representative bodies and may lead to longer timelines for communication with affected employees.
It’s a tough day in our organization. I am very aware of the impact on every person and family affected. We are working hard to treat each affected person with respect, and to provide a number of resources and points of contact to assist with this transition. This also includes packages that include severance payments, transitional health insurance benefits, and overseas employment support.
To those we bid farewell to today, we thank you for all you have done for this business and our clients. I am really grateful. To all the AWS creators, thank you for your compassion and sympathy for your colleagues.
Our business and team size have grown significantly over recent years, driven by customer demand for the cloud and the unique value that AWS provides. This growth has been achieved quickly as we have moved as fast as we can to build what customers need. Given this rapid growth, as well as the overall business climate and the overall economy, it is critical that we focus and place our resources behind our top priorities – those things that are most important to customers and that will move the needle in our business. In many cases, this means that team members change projects, initiatives, or teams in which they work; However, in other cases it has resulted in these roles being eliminated.
The fundamentals and outlook for our business are strong, and we are very confident in our long-term prospects. We are the leading provider of cloud services by a wide range of criteria, from our feature set to our security capabilities to our operational performance. We focus on continuing to innovate in the areas that matter most to our clients as we help them reduce costs, innovate quickly, and transform their organizations.
I am optimistic about the future. We will tackle our opportunities and our challenges, and we will continue to change the world.
Thank you,
Adam
Here’s the full note from Galetti:
PXT Team,
As Andy shared a few weeks ago, leaders across the company have been working closely with their teams to identify the investments they will make in the future, prioritizing what is most important to customers and the long-term health of our business. Because of PXT’s close partnership with the Company, these shifts also impact our OP2 plans, and we’ve made the difficult decision to eliminate additional roles within the PXT organization.
Today we shared this update with our PXT colleagues whose roles are impacted in the US, Canada and Costa Rica. In other areas, we follow local processes, which may include time to consult with employee representative bodies and may lead to longer timelines for communication with affected employees.
These decisions are not taken lightly, and I understand the impact they will have on both those moving on from the company as well as our remaining colleagues.
To those who leave, I want to thank you for your contributions. You helped build Amazon into the extraordinary company it is today, and we’re here to support you through this challenging time. In the US, we offer packages that include a 60-day transition period for non-workers with full pay and benefits, plus several additional weeks of termination depending on term, severance pay, transitional benefits, and outside employment support.
While this moment is difficult, I remain energized by the important work that lies ahead. Together, we’re building a workplace that helps fuel how Amazon innovates and delivers to customers. From making it easier for employees to find the information and help they need, to expanding our benefits, I’m proud of the progress we’ve made over the past few years. This meaningful work is a direct reflection of PXT’s tenacity, resilience, and leadership. Thank you.
Please know that the entire PXTLT, myself included, is here to answer your questions and support you.
-Beth
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”