Amazon will slash 9,000 jobs in the coming weeks, including positions in its Amazon Web Services (AWS) cloud division, as part of its ongoing cost cutting efforts. The move comes just months after the company announced plans to cut 18,000 jobs.
Amazon CEO Andy Jassy in a note to employees – that was also distributed through the company’s website – explained that the job cuts were part of its recently concluded “second phase of our operating plan (“OP2”).” He explained the cuts will mostly impact its AWS; People Experience and Technology Solutions (PXT); Advertising; and Twitch divisions.
“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 wrote. “The overriding tenet of our annual planning this year 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.”
AWS last month posted revenue growth in the mid-teens for the fourth quarter of 2022, which analysts’ equated to “flattish” growth for the cloud hyperscaler giant. The company at that time stated it was working through ongoing optimization plans to help goose revenues.
Amazon CFO Brian Olsavsky said at that time he expected “these optimization efforts will continue to be a headwind to AWS growth in at least the next couple of quarters,” he told investors. “Our customers are looking for ways to save money, and we spend a lot of our time trying to help them do so.”
Jassy added that AWS was “not focused on trying to optimize in any one quarter or any one year. We’re trying to build a set of relationships in business that outlast all of us. And so if it’s good for our customers to find a way to be more cost effective in an uncertain economy, our team is going to spend a lot of cycles doing that.”
Still Optimistic on AWSJassy in his latest note did explain that Amazon would continue to hire in other divisions “in strategic areas where we’ve prioritized allocating more resources,” and that he remains “very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, stores and AWS, and our newer customer experiences and businesses in which we’re investing.”
The new round of cuts comes on the heels of Amazon in January announcing plans to slash 18,000 jobs, which itself came less than two months after the company announced plans to cut 10,000 jobs. Most of those cuts were tied to Amazon’s Devices and Books business and voluntary reduction offers for employees in its PXT business.
Jassy acknowledged the close timing of the different moves.
“Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago,” Jassy wrote. “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. The same is true for this note as the impacted teams are not yet finished making final decisions on precisely which roles will be impacted.”
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