Amazon to cut 18,000 employees

The reduction, mainly in corporate jobs, is larger than expected.

Amazon.com Inc. is laying off more than 18,000 employees — a significantly bigger number than previously planned — in the latest sign that a technology slump is deepening.

Chief Executive Andy Jassy announced the move in a memo to staff Wednesday, saying it followed the company’s annual planning process. The cuts, which began last year, were previously expected to affect about 10,000 people. The reduction is concentrated in the firm’s corporate ranks, mostly Amazon’s retail division and human resources functions such as recruiting.

“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” he said. “These changes will help us pursue our long-term opportunities with a stronger cost structure.”

Although the prospect of layoffs has loomed over Amazon for months — the company has acknowledged that it hired too many people during the COVID-19 pandemic — the increasing total suggests that the company’s outlook has darkened. It joins other tech giants in making major cuts. Earlier Wednesday, Salesforce Inc. announced plans to eliminate about 10% of its workforce and reduce its real estate holdings.

Amazon investors gave a positive reaction to the latest belt-tightening efforts, betting that it may bolster profit at the company. The shares climbed nearly 2% in late trading after the Wall Street Journal first reported on the plan.

Eliminating 18,000 workers would be the biggest cut yet for tech companies during the current slowdown, but Amazon also has a far bigger workforce than its Silicon Valley peers. It had more than 1.5 million employees as of the end of September, meaning the latest cuts would represent about 1% of the workforce.

Jassy has eliminated or curtailed experimental and unprofitable businesses, including teams working on a telehealth service, a delivery robot and a kids’ video-calling device.

Amazon continues to invest in its cloud computing and advertising businesses as well as video streaming.

In Wednesday’s memo, Jassy said the company would provide severance, transitional health benefits and job placement to affected workers. It plans to begin discussing the moves with affected employees Jan. 18, he said.

“Companies that last a long time go through different phases,” Jassy said. “They’re not in heavy people expansion mode every year.