Amazon cuts 9,000 workers in latest round of layoffs
Thousands of Amazon employees learned they are out of job Wednesday morning as the company carried out its latest round of layoffs.
Last month, Amazon CEO Andy Jassy announced 9,000 positions would be cut by the end of April, bringing the total to 27,000 this year. The layoffs were primarily concentrated in Amazon’s cloud and human resources departments.
“It is a tough day across our organization,” said Amazon Web Services CEO Adam Selipsky in an email to employees shared with KUOW. “I fully realize the impact on every person and family who is affected.”
Amazon’s latest layoff is part of a broader trend across the tech industry. Microsoft, Meta, Google, and other large and mid-sized tech companies have been slashing thousands of jobs amid an uncertain economic environment.
Seattle-based companies account for 15% of tech layoffs so far this year, according to Roger Lee, an entrepreneur and creator of the site Layoffs.fyi. Lee began tracking layoffs early in the pandemic in the hopes of recruiting talent to his startup. He took his tool public so that others in the tech industry and media could keep track of the trend.
“So far in 2023, there have been 183,000 tech employees laid off,” he said. “That already exceeds last year's total of 164,000. And we're not even through April.”
Lee said the layoffs are a course correction after tech companies hired aggressively during the pandemic, when interest rates were low and demand for their services was at an all-time high. Amazon doubled its headcount during the pandemic to keep up with demand from customers stuck at home.
“Now that we're in a completely opposite economic environment than those years, it kind of makes sense that these same tech companies are performing layoffs to undo some of that over hiring from the past couple of years,” Lee said.
Still, Amazon and other tech companies aren’t losing money, they’re just making less of it. In his email to employees, Selipsky said that “the fundamentals and the outlook for our business are strong, and we are very confident in our long-term prospects.”
“Those companies are still very strong, they're still profitable,” Lee said. “You can argue that they don't have to do layoffs. But the fact is, they are facing a different economic environment than the one before, when they decided to double their headcount size.”
The layoffs have an outsized impact on a city like Seattle, but they don’t necessarily indicate trouble in the broader labor force. Nationwide, unemployment remained low, at 3.5% in March, according to the Bureau of Labor Statistics. But the employment picture differs dramatically across industries.
“It's almost a tale of two cities, between what's happening in tech and what's happening in the rest of the economy,” Lee said. “Tech was one of the biggest beneficiaries of the pandemic, so maybe it had the most to lose post-pandemic, where so many other industries, like retail and hospitality, were some of the biggest sufferers during the pandemic and now they're bouncing back.”
The labor force might be healthy by the numbers, but that doesn’t provide much comfort to workers who suddenly find themselves out of a job.
Sara was part of the first round of layoffs at Amazon last year. She asked to go by her first name to speak candidly about her experience at Amazon, and medical condition, without alerting prospective employers.
A year into Sara’s marketing job at Amazon, she was diagnosed with brain cancer. She took some time off to receive treatment, then returned part-time. She was planning to increase her hours in November, but then she was asked to join a Zoom call with two people she’d said she'd never met before. That’s how she learned she’d been laid off.
“My manager wasn't even on the call,” Sara said. “That was the worst part about it. I just was really, really sad about that, after I had worked with them for two-and-a-half years.”
Leave status doesn’t factor into layoff decisions, according to an Amazon spokesperson. The company said employees are still eligible for severance after their leave periods end.
Amazon faced criticism over how it conducted previous rounds of layoffs. Former employees complained of confusion and impersonal conversations. Some said they were immediately locked out of some of their Amazon accounts despite promises the company would help them with their career transitions. Employees whose jobs were safe weren't immediately notified, creating stressful waiting periods.
Amazon appeared to take a different tact with the latest round. The layoffs were conducted early Wednesday morning and all employees were notified via email, whether they still had a job or not.
After Sara’s termination last year, another department at Amazon asked if she would be willing to take on a contract role. It’s become somewhat common for tech recruiters to offer recently terminated employees contract work. Faced with limited options, Sara said yes.
“You just don't get benefits,” Sara said. “And that's really why I want to work, because I need health benefits. But obviously they don't include that in contracting.”
An Amazon spokesperson said the company tries to find full-time roles for laid-off employees as often as possible, but sometimes hires contractors for short-term projects. Amazon doesn't consider contracted partners to be replacements for full-time positions, the spokesperson said.
After a month, Sara took another contract role at a different company. She said finding a full-time salaried role is difficult in the current job market. Sara feels her new position and city – she moved from Seattle to Denver – fit better with her current needs. But she is still reliant on the federal COBRA program for health insurance.
Laid-off Amazon employees are typically eligible for a 60-day severance period, in which they still receive pay and benefits. Sara’s advice to employees laid off today is to use that time to recover.
“Be patient, take some time off,” she said. “Amazon is a really tough company to work for and I would say just take time off, regroup for as long as you can financially.”