Amazon makes another round of deep job cuts in its desire to get lean

Article by Jacob Bourne | Mar 21, 2023

The news: Amazon announced that it will lay off an additional 9,000 workers on top of the 18,000 job cuts it made in January.

A Monday memo from CEO Andy Jassy indicated that the most recent cuts will affect the company’s cloud division, advertising, HR, and Twitch, per CNBC.

Fears take shape: We predicted that tech industry layoffs would continue past January’s bloodbath. Amazon’s latest cuts follow similar moves by Meta, Google, and Microsoft.

Like many of its Big Tech peers, Amazon pursued rampant growth during the pandemic. Globally, its employee numbers jumped to over 1.6 million by the end of 2021, up from 798,000 in Q4 2019, per CNBC.
Reduced consumer spending coupled with the Federal Reserve’s interest rate hikes have made tech companies question their large payrolls.
Apple, the most profitable among Big Tech, avoided the pandemic-era hiring spree and is now cutting other costs to avoid layoffs.

Tech too reactive for its own good: Just like it was shortsighted during the pandemic, the tech industry may come to regret its deep workforce cuts in the future.

Tech companies are shedding their workforces during the tightest US labor market in 30 years, with 0.6 workers available per job to fill 11 million open roles, per Forbes. And the worker shortages aren’t going away anytime soon.
Big Tech may be viewing increased automation as a safety blanket to insulate itself from the tight labor market, but companies’ volatile hiring strategies in recent years suggest they’re operating impulsively.
Automation will likely transform the workplace, but it’s also likely to require human participation, oversight, and troubleshooting to work.
A leaner tech industry might find future growth difficult as talent migrates to other sectors.