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What just happened? Two months after announcing that it was letting go of a record 18,000 employees, Amazon has revealed it will be cutting a further 9,000 jobs, bringing the total to 27,000. The new cuts will impact jobs across Amazon Web Services, PXT, and Advertising. Subsidiary Twitch will also be affected, with more than 400 workers at the game streaming site losing their jobs.
Like so many tech giants, Amazon's overhiring during the height of the pandemic has led to the company cutting jobs during the current economic downturn. CEO Andy Jassy confirmed in January that Amazon would be slashing 18,000 jobs globally, with the majority of eliminations coming from Amazon Stores and PXT organizations.
In a new post, Jassy writes that Amazon intends to eliminate around 9,000 more positions in the next few weeks. "This was a difficult decision, but one that we think is best for the company long term," wrote the Amazon boss.
Jassy writes that the shaky economy has led to Amazon choosing to be more streamlined in its costs and headcount. "As a company focused on building community together, this decision was incredibly difficult and one we did not make without considerable thought," he added.
In a separate announcement, Twitch CEO Dan Clancy confirmed that just over 400 people at the company were being let go. "Like many companies, our business has been impacted by the current macroeconomic environment, and user and revenue growth has not kept pace with our expectations," Clancy wrote. Twitch's recent changes to the way it pays streamers have led to some top names leaving for rival streaming platforms.
Interestingly, the announcement comes just days after Twitch CEO Emmet Shear resigned as head of the company. Much of Shear's announcement focused on him becoming a father and moving on to a new phase in life, but one has to wonder if the incoming layoffs didn't play some part in his decision.
It might seem unusual (or cruel) for Amazon to announce 18,000 job cuts, then add 9,000 more to the list at a later date. Jassy claims this is because some teams did not finish their analysis in late fall, and as these assessments can determine which jobs are being cut, Amazon didn't want to rush through them.
Jassy adds that a final decision has not been made as to which job roles will be cut from the impacted teams. This should be made by mid to late April, at which point employees will be notified.
Laid-off workers will receive packages that include a separation payment, transitional health insurance benefits, and external job placement support.
Amazon had its worst-ever fourth quarter in 2022 and experienced its first annual net loss since 2014. In addition to the layoffs, the company is shuttering eight more Amazon Go stores, closing and abandoning plans for dozens of US warehouses, and pausing construction on its second headquarters in Virginia.