Amazon on Wednesday commenced the latest wave of job cuts in its corporate workforce in what’s poised to be the largest round of layoffs in the company’s history.
Employees were notified of the cuts in emails sent by Doug Herrington, the company’s worldwide retail chief, and human resources head Beth Galetti, CNBC confirmed. Amazon said earlier this month that it will cut more than 18,000 jobs.
Amazon’s human resources and stores divisions are likely to be among the organizations most severely impacted by the job cuts. The company expects to notify all affected employees in the U.S., Canada and Costa Rica by the end of the day, Galetti and Herrington said in their memos.
Employees in other regions may be informed later. In China, for example, the company will notify staffers after the Lunar New Year.
The layoffs come after a period of rapid head count growth at Amazon during the Covid-19 pandemic. In November, CEO Andy Jassy said the company would begin eliminating roles, primarily in its devices and recruiting organizations.
Jassy is also undergoing a broad review of Amazon’s expenses as the company reckons with an economic downturn and slowing growth in its core retail business. Amazon froze hiring in its corporate workforce, axed some experimental projects and slowed warehouse expansion.
WW Stores Team,
I want to send a note that today we will be notifying employees impacted by our decision to reduce our Amazon WW stores corporate headcount. Notification emails will be sent out to impacted employees shortly, and we expect all notifications in the U.S., Canada and Costa Rica to be completed by end of the day today. In other regions, we are following legal processes, which may include time for a consultation with employee representative bodies starting as soon as today and possibly resulting in longer timelines to communicate with impacted employees. And in China, we will notify employees after the Chinese New Year.
While it will be painful to say goodbye to many of our talented colleagues, it is an important part of a wider effort to lower our cost to serve so we can continue investing in the wide selection, low prices, and fast shipping that our customers love. During Covid, our first priority was scaling to meet the needs of our customers while ensuring the safety of our employees. I’m incredibly proud of this team’s work during this period. Although other companies might have balked at the short-term economics, we prioritized investing for customers and employees during these unprecedented times.
The exit out of Covid this past year was challenging, with labor shortages, supply chain difficulties, inflation, and productivity overhang from growing our fulfillment and transportation networks so substantially during the pandemic, all of which increased our cost to serve. As we head into 2023, we remain in uncertain economic times. Therefore, we’ve determined that we need to take further steps to improve our cost structure so we can keep investing in the customer experience that attracts customers to Amazon and grows our business.
Our plan to improve our cost structure will unfortunately include role reductions. It is painful and rare for us to take this step, and I know how difficult this is on the individuals impacted and their loved ones. Our goal is to make sure every impacted employee is assisted in this transition, so for example, in the U.S., we are providing packages that include a 60-day non-working transitional period with full pay and benefits, plus an additional several weeks of severance depending on the length of time with the company, a separation payment, transitional benefits, and external job placement support. I would like to personally thank each and everyone of you affected by the plan changes for your contributions to our customers and your broader team.
Role reductions are one of several steps we are taking to lower our cost to serve. We are also increasing local in-stock of the most popular times, making it easier for customers to consolidate shipments for multiple items, and increasing the ways customers can buy the low-priced everyday essentials they need to keep their households running, all with the aim of reducing our network and delivery costs. And by improving our cost structure, we are also able to continue investing meaningfully in big growth areas such as grocery, Amazon Business, Buy with Prime, and healthcare.
To those who are staying, I know this is a difficult time for you, as well, and it’s important we support one another. We are saying goodbye to people we’ve worked closely with, and there is plenty of hard work ahead as your innovate on behalf of customers. Although I would prefer not to eliminate even a single role, we are making these changes now to keep investing in improving the customer experience, which will strengthen our business for the long term.
As I’ve shared with many of you, I have never been more optimistic about the opportunity in front of us. For over 25 years, we’ve innovated on behalf of customers, and in so many ways, we are just getting started. Lowering our cost to serve will be a core priority for us in the years ahead to fund even more innovation. It’s not just about doing more with less, but rethinking how we serve our customers, how we organize internally, and what new areas of innovation we invest in. Every team has a role to play in finding ways to reduce costs while improving selection, pricing, and delivery speeds. I am confident that Amazonians will bring their ownership, innovation, and bias for action to this challenge, unlocking even more value for customers.
Today we took the difficult step of reducing roles across Amazon. While several teams are impacted, the majority of role eliminations are in our WW Amazon Stores business and our People Experience & Technology (PXT) organization.
Conversations with impacted employees took place around the world today, and this morning, Pacific Time, notification messages were sent to all impacted employees in the U.S., Canada, and Costa Rica. We are providing impacted employees with a number of resources, and PXT leaders will host country-specific information sessions for the U.S. and Canada today while leaders are setting up meetings with each affected team member. In other regions, we are following local processes, which may include time for consultation with employee representative bodies and possibly result in longer timelines to communicate with impacted employees. In China, we will notify employees after the Chinese New Year.
Our priority in the coming days is supporting those who are affected. To help with the transition, we are providing packages that include a separation payment, transitional benefits as applicable by country, and external job placement support.
Please continue to show the support and care that I so often witness here at Amazon. This is a very difficult time, so we encourage you to reach out to My HR with questions and remember that our Employee Assistance Program (EAP) is available 24/7 for free and confidential help.