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Amazon CEO confirms company is cutting over 18,000 jobs

Updated figure 80% larger than what was reported in November

Amazon q4 revenues beat expectations; income, EPS lag Photo: Jim Allen/FreightWaves)

Updated Thursday, Jan. 5 at 11 a.m. EST

In November, a report alleged that Amazon (NASDAQ: AMZN) would lay off around 10,000 employees in a round of peak-season job cuts. Now, the figure is confirmed to be significantly higher.

In a Wednesday internal memo that was released publicly by Amazon on Thursday morning, CEO Andy Jassy said that the number of employees affected by the layoffs will ultimately be over 18,000. Jassy added that several teams are being affected by the pullback but that the majority are in the firm’s Stores and People Experience and Technology (PXT) organizations.

The cuts represent one of the largest rounds of layoffs in history. It’s also the largest head count reduction among tech companies that have recently trimmed their workforces.

“[The senior leadership team] and I are deeply aware that these role eliminations are difficult for people, and we don’t take these decisions lightly or underestimate how much they might affect the lives of those who are impacted,” Jassy told employees in the memo. “We are working to support those who are affected and are providing packages that include a separation payment, transitional health insurance benefits, and external job placement support.”

The Amazon CEO indicated that the layoffs were part of an annual planning process, in which company leaders work with different teams to track head count, identify future investments and determine customer satisfaction. Widespread job cuts were one outcome of the process, with Jassy explaining that “we’ve hired rapidly over the last several years.”

Originally, the company had planned to reveal the 18,000 figure to employees at a later date, but Jassy said a leak Wednesday led to the decision to share it now.

Watch: Amazon pulling back air cargo

The initial report in November suggested the cuts would also impact Amazon’s devices division, which houses products like Alexa, and its retail business, which is responsible for aspects of the company’s online shopping, physical retail and logistics operations, but neither part of the business was mentioned in Wednesday’s memo. Hourly workers, like drivers and warehouse associates, were reported to not be impacted.

A large round of layoffs was not necessarily unexpected for the e-commerce giant, which in the months prior to the November report had implemented hiring freezes in several segments as well as at the corporate level.

It had also emphasized scaling back some of its logistics operations, including the closures, cancellations and delayed openings of more than 60 facilities. The firm’s free Whole Foods delivery offering and Scout home delivery robot were also scrapped in the lead-up to the cuts.

In contending with that bloat and the company’s overhiring of corporate employees, layoffs may ease pressure on Amazon as it heads into its first quarterly earnings call of the year next month.

Jassy appeared to give a nod to investors in Thursday’s announcement, reassuring them of the company’s strength.

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so. These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles. Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” he said.

This is a developing story. Check back here for more updates.

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Jack Daleo

Jack Daleo is a staff writer for Flying Magazine covering advanced air mobility, including everything from drones to unmanned aircraft systems to space travel — and a whole lot more. He spent close to two years reporting on drone delivery for FreightWaves, covering the biggest news and developments in the space and connecting with industry executives and experts. Jack is also a basketball aficionado, a frequent traveler and a lover of all things logistics.