Amazon Stock Leaps As CEO Andy Jassy Confirms Plans To Cut 18,000 Jobs
"Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so," said CEO Andy Jassy.
"Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so," said CEO Andy Jassy.
Amazon (AMZN) - Get Free Report shares powered higher Thursday after the CEO Andy Jassy confirmed the tech and online retail giant is preparing a bigger-than-expected series of layoffs and job cuts amid what it called an "uncertain and difficult" global economy.
The Wall Street Journal had said Amazon will cull as many as 17,000 from its global workforce, focused largely on Amazon Stores and its PXT organization but including upper management positions, over the coming weeks. The overall figure is significantly higher than the 10,000 job reduction tally reported in November. Jassy said the tally would rise to around 18,000, with notifications to begin on January 18.
Amazon, the second-largest U.S. employer behind Walmart, with a global workforce of around 1.6 million, said its job cuts review had been "more difficult given the uncertain economy and that we’ve hired rapidly over the last several years", a view echoed by Salesforce (CRM) - Get Free Report CEO Marc Benioff when he detailed headcount reductions of around 10% of its 56,600-strong workforce at the enterprise software group yesterday.
"We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted. However, because one of our teammates leaked this information externally, we decided it was better to share this news earlier so you can hear the details directly from me," Jassy said in a company-wide email.
"Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so," he added. "These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles."
Amazon shares were marked 2.8% higher in pre-market trading to indicate an opening bell price of $87.52 each.
Facebook parent Meta Platforms (META) - Get Free Report said in November it would eliminate around 11,000 jobs, its biggest round of cuts since going public in 2012, amid weaker ad spending and rising costs linked to its AI-focused Reality Labs division.
Apple (AAPL) - Get Free Report CEO Tim Cook also said in November that the tech giant has slowed some of it hiring into the final months of the year, adding to pressure on tech sector jobs that reflect growing concern for the health of the global economy.
Cook's indication for muted higher echoes that of ad giant Google (GOOGL) - Get Free Report, which said its fourth quarter headcount additions would be "significantly lower than Q3", and Microsoft MSFT, which forecast only "minimal" headcount growth over the final three months of the year.
Amazon issued a disappointing holiday revenue forecast in late October, and unveiled slowing growth in its lucrative Web Services business, both of which clouded a better-than-expected third-quarter earnings report.
Jassy told investors at the time that while he was "encouraged" by the third quarter progress, "we recognize there's still a lot of opportunity to continue to improve productivity and drive cost efficiencies throughout our networks."
"We have identified initiatives that the teams continue to work hard on, and we expect to see further improvement in the quarters ahead," he added.
What's Your Reaction?
