Amazon is shedding another 9,000 employees, adding to the 18,000 layoffs it announced in January, as a drop in consumer spending forced the e-commerce and cloud computing giant into retrenchment.
The majority of the new cuts will come to the company’s cloud computing unit, Amazon Web Services, video-game streaming platform Twitch, and human resources and advertising departments.
The company employs more than 1.5 million workers worldwide, mostly warehouse and fulfillment workers. Amazon’s recent job cuts have targeted the company’s better-paid roles in an effort to reshape its back office operations.
“Because of the uncertain economy we live in, and the uncertainty of the future, we have chosen to be leaner in costs and headcount,” chief executive Andy Jassy said Monday.
The move comes after the Seattle-based company paused construction on its new headquarters in Virginia, pulling back from launching new physical grocery stores and closing warehouses in the UK in recent months.
Like other tech groups, Amazon has hired heavily in recent years to meet stronger demand for services from customers locked out during the pandemic. This expansion “made sense because of what’s happening in business and the economy as a whole”, Jassy said.
Higher interest rates and a decline in consumer spending power have forced tech companies to cut spending, with nearly 140,000 layoffs by tech groups in 2023, compared with 161,000 in all of 2022, according to Layoffs.fyi, a website that tracks layoffs. -offs in the sector.
Investors have rewarded tech groups for job cuts, with the share prices of Meta, Alphabet, Amazon and Microsoft rising from the start of 2023.
But these efficiency measures have come at a price. The big four tech groups have announced that they are taking more than $10bn in costs related to mass redundancies and other cost-cutting moves.
Amazon began cutting headcount in November, starting with a “voluntary order” program. In January it announced it would cut 18,000 jobs. Its share price has risen 14 per cent this year, valuing the company at more than $1tn. Amazon shares fell 1.5 percent in morning trading on Friday.
Jassy said the cuts were announced in stages as the team completed an internal analysis, adding that a final decision would be made by mid-April.
Amazon is spending $640 million on layoffs in the fourth quarter of 2022, as well as an additional $720 million to leave real estate projects.