Amazon’s restructuring is not over in 2023. The e-commerce giant, which has been able to expand into other businesses as well, has just announced a massive cut of approximately 9,000 employees. AWS, Twitch and the company’s advertising division are among the hardest hit.
This latest move comes roughly three months after the first large-scale shutdowns. After a series of rumors, the company founded by Jeff Bezos and directed by Andy Jassy announced in January of this year a massive layoff of 18,000 workers, dwarfing the rest of the Big Tech.
Amazon says it’s chasing efficiency
Jassy has said in a statement that the cuts announced on Monday are part of “the second phase” of his plan to reduce spending. “This was a difficult decision, but we believe that it is the best thing for the company in the long term,” says the executive, who assures that he aims to achieve greater efficiency this year.
One of the consequences of this movement that attracts powerful attention is the reduction of personnel of AWS. We do not know exactly how many employees will leave the cloud computing services division, but it should be noted that it is one of Amazon’s economic pillars.
The aforementioned division, according to the United States Securities and Exchange Commission, is the cornerstone of economic profit of the American conglomerate. In fact, it controls a third of the market that has high-end competitors like Microsoft’s Azure and Alphabet’s Google Cloud.
If we take Alphabet, which recently announced the layoff of 12,000 employees, as a reference, this company decided not to apply cuts to its cloud computing business. Amazon’s plan, apparently, is much more aggressive than the one launched by other companies in the sector.
Amazon has experienced in 2023 the most important adjustment in its 28-year history.
The restructuring plan promoted by Jassy will not go unnoticed in the history of Amazon. We are talking about the most important adjustment in the 28 years of history of the company. But let’s recap a little to understand what is the origin of such movement and how it will affect the structure.
During the pandemic, Amazon experienced tremendous growth. Almost all of its business units began to perform very well. Thus, between 2020 and 2021, the company hired a large amount of talent, raising its workforce to 1.5 million employees. That trend, however, did not continue.
Towards the end of last year, the company posted a growth rate that was below expectations, which predicted difficult times. Amid massive cutbacks by other tech players, Amazon has set a goal of trimming its “least profitable” divisions.
It should be noted that every year, like many other companies, Amazon carefully analyzes the performance of each of its business units. In 2023, however, Jassy called for a more drastic approach. Thus, objectives were reconsidered and the first 18,000 layoffs arrived.
But not all team leaders, explains the CEO himself, “finished their analysis by the end of the fall.” In this sense, now that they have delivered their reports, the company has decided to announce this second wave of cuts which is also counted by thousands, as we say, 9,000 fewer positions.
Images: Daniel Oberhaus
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