Amazon begins layoffs affecting HR and AWS cloud entities

Amazon On Wednesday, the layoffs of some employees in cloud computing and human resources began.

Adam Selipsky, CEO of Amazon Web Services, and Beth Galetti, head of human resources, sent notes to employees in the US, Canada and Costa Rica to inform them of the job cuts.

“It’s a tough day for our organization,” Selipsky wrote in the memo.

The layoffs are part of previously announced job cuts that are expected to affect 9,000 employees. Last week, Amazon laid off some employees at its advertising unit, and it has laid off employees at its video game and Twitch live streaming units in recent weeks.

Amazon completed a separate round of cuts earlier this year that affected about 18,000 employees. This, along with this month’s cuts, marks the largest layoffs in Amazon’s 29-year history.

Amazon CEO Andy Jassy has aggressively cut costs across the business as the company anticipates an economic downturn and slowing growth in its core retail business. Amazon froze hiring of its corporate workforce, canceled some experimental projects, and slowed warehouse expansion.

By announcing layoffs at Ads and AWS, Jassy has shown that two of Amazon’s largest and most profitable companies aren’t immune to the cost cuts. Both AWS and Ads have seen slowing growth in recent months as companies cut spending amid a tough economic environment. Some teams within AWS were included in the earlier round of layoffs.

AWS headcount skyrocketed during the Covid-19 pandemic, which proved to be a tremendous boon for Amazon and other cloud providers as businesses, government agencies, and schools accelerated their transition to the cloud.

“With this rapid growth, as well as the general business and macroeconomic climate, it is critical that we focus on identifying our resources and putting them behind our top priorities – the things that matter most to clients and that are the needle for our business will move,” Selipsky wrote in the memo. “In many cases, this means team members deferring the projects, initiatives, or teams they are working on; in other cases, however, this has led to these role eliminations.”

Amazon will report first-quarter results after Thursday’s bell. Investors will be looking for insights into whether Jassy’s cost-cutting efforts have improved profitability and when Amazon executives expect AWS growth to reaccelerate.

Amazon’s shares rose 3.2% in morning trade on Wednesday.

Here is Selipsky’s full memo:

AWS team,

As you know, we recently made the difficult decision to eliminate some roles at Amazon globally, including within AWS. I wanted to let you know that discussions with affected AWS employees began today, with notifications being sent to all affected employees in the US, Canada and Costa Rica. In other regions, we follow local processes that include time for consultation with employee representatives and may result in longer deadlines for communicating with affected employees.

It’s a tough day across our organization. I am fully aware of the impact on each affected person and family. We are working hard to treat everyone affected with respect and provide a range of resources and touchpoints to support this transition. This also includes packages with a separation allowance, transitional health insurance benefits and support with external job placement.

To everyone we’re saying goodbye to today, thank you for everything you’ve done for this company and our customers. I’m really thankful. Thank you to all AWS developers for your compassion and empathy for your colleagues.

Both the size of our company and the size of our team have grown significantly over the past few years, driven by customer demand for the cloud and the unique value that AWS offers. This growth came quickly as we moved as quickly as possible to build what customers need. With this rapid growth, as well as the general business and macroeconomic climate, it’s critical that we focus on identifying our resources and putting them behind our top priorities – the things that matter most to clients and that are the needle for ours business will move. In many cases, this means that team members change the projects, initiatives, or teams they work on; In other cases, however, this has led to these role eliminations.

The fundamentals and prospects for our business are strong and we are very confident about our long-term prospects. We’re the #1 cloud provider on a variety of benchmarks, from our feature set to our security features to our operational performance. We are focused on continuing to innovate in the areas that matter most to our clients while helping them minimize costs, innovate fast, and transform their organizations.

I look to the future with optimism. We will address our opportunities and challenges and continue to change the world.

Thank you very much,

Adam

And here’s Galetti’s full memo:

pxt team,

As Andy shared a few weeks ago, leaders across the business have been working closely with their teams to decide what investments to make for the future, prioritizing what’s most important to customers and the long-term health of our businesses. Given PXT’s close partnership with the company, these shifts also impact our OP2 plans and we have made the difficult decision to eliminate additional roles within the PXT organization.

Today we shared this update with our PXT colleagues whose roles in the US, Canada and Costa Rica were affected. In other regions, we follow local processes that include time for consultation with employee representatives and may result in longer deadlines for communicating with affected employees.

These decisions are not taken lightly and I recognize the impact they will have on both those leaving and our remaining colleagues.

I would like to thank those who are leaving for their contributions. You’ve helped make Amazon the extraordinary company it is today, and we’re here to support you through this difficult time. In the US, we offer packages that include a 60-day grace period with full salary and benefits, plus an additional multi-week severance pay based on seniority, severance pay, transitional pay, and outside job placement assistance.

Although this moment is tough, I remain energized from the important work ahead. Together we are building a workplace that contributes to how Amazonians invent and deliver for customers. I’m proud of the progress we’ve made over the past few years, from making it easier for employees to find information and help, to expanding our benefits. This meaningful work is a direct reflection of PXT’s tenacity, resilience and leadership. Thank you very much.

Please note that the entire PXTLT, including myself, is here to answer your questions and support you.

-Beth