By Jeffrey Dastin and Tiyashi Datta
(Reuters) – Amazon.com Inc on Monday said it would axe another 9,000 roles, piling on to a wave of layoffs that has swept the technology sector as an uncertain economy forces companies to get leaner.
In a remarkable turn for a company that has long touted its job creation, Amazon will have eliminated 27,000 positions in recent months, or 9% of its roughly 300,000-strong corporate workforce.
The latest cuts focus on Amazon’s highly-profitable cloud and advertising divisions, once seen as untouchable until economic concerns led business customers to scrutinize their spending.
The layoffs will affect Amazon’s streaming unit Twitch as well. Dan Clancy, who was named as CEO of Twitch last week, said the platform will lay off more than 400 employees.
Amazon aims to finalize whom it will terminate in the new round of job cuts by April.
The company’s stock fell 1.8%.
The decision follows a near-endless drumbeat of layoff news in the technology sector that has seen some of the world’s most valuable corporations, among them Microsoft Corp and Alphabet Inc, sever ties with staggering numbers of employees they once courted in droves.
“I don’t think this means much for other companies, except that all will be more careful before allowing their headcount to balloon in the future,” Wedbush Securities analyst Michael Pachter said.
In what now seems a harbinger, Facebook’s parent Meta Platforms Inc said last week it would cut 10,000 jobs this year, kicking off a second round of layoffs for the sector following its elimination of more than 11,000 roles in 2022.
GRAPHIC-Amazon announces fresh layoffs of 9,000 employees (https://www.reuters.com/graphics/TECH-LAYOFFS/META/byprlmorqpe/graphic.jpg)
In a note to staff that Amazon posted online, its CEO Andy Jassy said the decision stemmed from an ongoing analysis of priorities and uncertainty about the economy.
“Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago,” he wrote. “The short answer is that not all of the teams were done with their analyses in the late fall.”
“Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
Amazon last month said operating profit may continue to slump in the current quarter, hit by the financial impact of consumers and cloud customers clamping down on spending.
The Athena Coalition, a labor and activist group that is critical of Amazon, said in a statement: “None of these layoffs have to happen. Jassy is choosing to make them happen to pad Amazon’s bottom line.”
The company has scaled back or shut down entire services like its virtual primary care offering for employers in recent months.
(Reporting by Jeffrey Dastin in Palo Alto, Tiyashi Datta in Bengaluru; Additional reporting by Akash Sriram in Bengaluru; Editing by David Gaffen, Nick Zieminski and Devika Syamnath)