The U.S. retail giant Amazon this week began the largest layoffs in its history and will continue until 2023. Now that the layoffs have been underway for a week, what impact has it had on Amazon? Mainstream U.S. online media BI says Amazon, which has served as an engine of job growth for more than a decade, has suddenly stopped spinning, and the painful adjustment is just beginning.
As early as Oct. 18, Amazon founder Jeff Bezos tweeted that companies should be “proactive” in the face of a possible recession.
A series of internal Amazon messages obtained by BI over the past two months show that managers at the company are trying to identify underperformers and use performance improvement programs to force them out. By mid-October, the company had shuttered or downsized several teams, including its robotics division.
Soon after, a senior manager at Amazon’s cloud computing unit, AWS, ordered a hiring halt and “evaluate your team members as soon as possible,” by which he meant pitting employees against each other in an attempt to force out the lowest-ranked employees. The executive said, “I know the news sounds mixed, but we need to hire quickly and identify the few employees we don’t think are a good fit for our growth ambitions.”
The next day, Amazon announced a company-wide hiring freeze, but that still didn’t seem to be enough. on November 15, Amazon began the most wide-ranging corporate layoffs in its history. It reportedly eliminated about 10,000 jobs.
The employment engine suddenly stops
For more than a decade, Amazon has been a powerful engine of job growth in the United States, building a vast network of warehouses operated by hundreds of thousands of employees while launching a series of ambitious projects such as the audio platform Amp, the video streaming service Luna, the travel division Explore and the satellite Internet project Kuiper. Amazon is also making a push into consumer electronics with products such as Astro, a home robot, Halo, a fitness tracking wristband, and Glow, a children’s tablet.
This week’s big layoffs mark the end of this incredible growth rate. Many ambitious plans have died, and others are in a half-dead state. The epidemic-era online shopping boom has come to a screeching halt, prompting the company to sublease unused warehouse space. Hundreds of recruiters have left, suggesting a continued decline in hiring.
Amazon has sharply cut the number of employees on several Alexa teams, including those working to make Alexa sound more human, such as learning new skills and answering questions more creatively. Amazon also made significant cuts to the Luna team and offered voluntary buyout (voluntary separation) options to hires in the U.S. and India.
Later this week, employees in Amazon’s retail business unit learned that they, too, will face layoffs once the holiday shopping season ends.
Executives were shocked, and employees questioned
The sudden change from a hiring frenzy to drastic layoffs also seems to have shocked Amazon’s leadership. Although Amazon CEO Andy Jassy (Andy Jassy) confirmed that layoffs will continue through 2023, executives have been surprisingly silent over the past week, hardly sharing any specific layoff details with employees. This has left employees looking around for any useful snippets of information. As time goes on, this information vacuum is sparking more anxiety, anger and doubt about the future.
After the New York Times initially reported that Amazon planned to lay off 10,000 employees, employees in the company’s devices division, which includes Alexa as well as Luna, received cryptic invitations to meet with executives and HR. On internal Slack channels and social media, employees frantically asked if receiving such invitations meant they would be fired. One employee asked, “Is this what I think it is?”
As of Tuesday morning local time, Amazon employees had created a dedicated Slack channel to share information about the layoffs and compiled a list of departments that might be affected. They have also created a “safe list” of teams that may avoid mass layoffs. In the absence of leadership communication, the channel quickly grew to nearly 20,000 members.
Using a feature that allowed employees to post anonymously, laid-off employees spoke openly about their feelings. Immigrant employees feared being unable to find employers willing to sponsor their work visas to avoid being forced to leave the United States. Other Amazon employees said they were laid off while they were seriously ill or pregnant. Time and time again, employees asked if anyone knew if their team was safe.
One employee wrote, “I don’t know how to break the news to my kids. They used to be proud to have a father who was a member of the Amazon Alexa team. But now, I’m very worried.”
The most prevalent sentiment in Amazon’s employee Slack channels was anger, and it was often directed at Amazon’s executives. Meta employees at least got the message from its CEO, Mark Zuckerberg, himself,” one employee wrote. Instead, we got news of layoffs from the press on Monday, and we are very frustrated with the attitude of the ‘S Team (the company’s most core executive team)’.” He was referring to a memo Zuckerberg sent to employees announcing that the company would cut 13 percent of its workforce.
Another employee wrote, “When is the next all-staff meeting where we can submit questions to the ‘S Team’? I have a few questions.” One of the most important is: How do you plan to win back the trust that was completely destroyed in November?” A third employee wrote, “At some point, we have to stop calling them leaders.”
Employees also offered comfort and support to each other. Some passed along the “Bizarre Incident Response Form,” a one-page document developed by Amazon’s product managers to help in times of crisis. Others promised to share the LinkedIn profiles of their laid-off colleagues on their social networks.
Alexa team hit the hardest
Starting Wednesday, Amazon executives began confirming what many employees already knew from the press or Slack channels: the devices division has been overhauled and more layoffs are in the works.
In a memo to employees, Dave Limp, Amazon’s head of devices, blamed the layoffs on the unfavorable economic environment. He wrote: “Past experience has taught us that when there are economic difficulties, customers are often attracted to companies and products that they believe have the best customer experience and take the best care of them. Historically, Amazon has done a very good job of this.”
Posts on LinkedIn by laid-off Amazon employees show that the team responsible for Alexa’s artificial intelligence system, natural language understanding and conversational capabilities was hit hardest by the layoffs.
The layoffs indicate that Amazon plans to further cut Alexa’s size. For years, Amazon has reportedly always known that customers primarily use Alexa to play music, control lights and set timers. But the division has lost billions of dollars as Amazon continues to devote significant resources to developing increasingly powerful features for the virtual assistant.
Retail division layoffs after the holiday season
Some employees in Amazon’s sprawling retail division learned Thursday morning that their department may be affected by layoffs after the holiday shopping rush, leaving many employees wondering if they should stick around at their jobs. One employee said, “We’re not motivated to work at all.”
In a memo sent to all employees Thursday afternoon, Jassy confirmed that the layoffs will continue through 2023 and affect the retail and human resources departments. In the letter, he expressed feelings of guilt.
I have been in this role for a year and a half, and this is, without a doubt, the most difficult decision we have made in that time,” Jassy wrote. I and any leader who makes these decisions understand that it is not just these roles that we are eliminating, but the lives of those with emotions, ambitions and responsibilities that will be impacted.”