Dive Brief:
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Amazon will slash another 16,000 roles across its organization, according to an internal memo from Beth Galetti, senior vice president of people experience and technology, which was shared publicly Wednesday.
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The move is part of a corporate downsizing push announced in October, which at that time entailed 14,000 jobs.
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While the effort aims to “strengthen our organization by reducing layers, increasing ownership, and removing bureaucracy,” Amazon is also hiring and investing in certain areas, Galetti said.
Dive Insight:
Amazon on Wednesday declined to say how much of this workforce reduction affects its retail operations, which in many ways are being overshadowed by other aspects of its business.
Those include adjacent businesses like advertising, subscriptions and marketplace seller services, as well as its massive AWS cloud unit. In Q3, seller services sales grew 12% year over year to $42.5 billion; advertising grew 24% to $17.7 billion; and subscription services grew 11% to $12.6 billion; and AWS net sales grew 20% to over $33 billion.
Artificial intelligence is looming over the company’s strategic adjustments. In October Amazon said it was laying off workers because it anticipates a need for fewer people as generative AI continues to advance, and a few days later CEO Andy Jassy predicted that AI would help push e-commerce to finally overtake brick and mortar.
“I still think if you look at the worldwide market segment share of retail, still 80% to 85% of it lives in physical stores,” he said. “That equation is going to flip over time. And I think AI is going to only accelerate that.”
The company earlier this week said it will close all of its Amazon Fresh and Go stores and expand its Whole Foods fleet and same-day grocery delivery operation.
Most U.S.-based employees affected by this latest round of layoffs will get 90 days to find a new internal role, with that timing varying internationally, Galetti said in her memo. Those unable or unwilling to find one will get transition support including severance pay, outplacement services, health insurance benefits (as applicable) and more.
She also assured Amazon employees that this second big round of layoffs doesn’t reflect any plan to “announce broad reductions every few months.” Still, each team there continues “to evaluate the ownership, speed, and capacity to invent for customers, and make adjustments as appropriate.”
“That’s never been more important than it is today in a world that’s changing faster than ever,” she said.
