Amazon CEO Andy Jassy speaks at the Bloomberg Technology Summit in San Francisco on June 8, 2022.
David Paul Morris | Bloomberg | Getty Images
Amazon began laying off some employees in its advertising on Tuesday as part of CEO Andy Jassy’s efforts to control costs, the company confirmed.
Paul Kotas, Amazon’s senior vice president of advertising, IMDb and Grand Challenge, sent a memo to employees notifying them of the layoffs, according to a copy of the memo shared by an Amazon spokesperson.
“As Andy shared a few weeks ago, throughout the 2023 planning process, we have carefully prioritized resources with a view to maximizing customer benefits and the long-term health of our business,” said Kotas writes. “For Ads, this process involved reassigning resources by moving team members, slowing down or stopping certain programs, or concluding that we didn’t have the right skills in place to meet our priorities. As a result, we’ve made well-considered decisions on how best to move forward, resulting in job cuts for a small percentage of our organization.”
The company began notifying workers they were being laid off via email Tuesday morning, according to two affected employees. These people requested anonymity because they were not authorized to speak on the subject.
In an email to affected employees, Amazon said the layoffs will begin on June 20 or July 17 if the affected workers live in New York and New Jersey, after a 60-90 day transition period, during which they will have the possibility of looking for another position within the company.
It’s unclear how many people are being laid off in the advertising unit. Jassy announced last month that Amazon would lay off 9,000 employees, in addition to the 18,000 layoffs already announced last November and January. Previous cuts were mostly concentrated in the retail, devices, recruitment and human resources groups.
In March, Jassy said the latest round would affect employees in Amazon’s advertising, cloud computing, Twitch livestreaming and human resources divisions. Earlier this month, about 100 employees were also laid off in Amazon’s video game business.
Amazon is suffering the largest layoffs in its 29-year history after carrying out a wave of hiring during the Covid pandemic. The company’s global workforce grew to more than 1.6 million at the end of 2021, from 798,000 in the fourth quarter of 2019.
Jassy is also taking a broad view of company spending as it factors in an economic downturn and slowing growth in its core retail business. Amazon froze hiring of its corporate staff, cut some experimental projects and slowed its warehouse expansion.
By announcing layoffs in Amazon’s advertising and web services, Jassy showed that two of Amazon’s largest and most profitable businesses aren’t immune to cost-cutting.
Here is the full memo from Kotas:
I wanted to share that this morning we made the difficult decision to notify Amazon Ads team members who have been impacted by the role reductions in the US and Canada. In other regions, we follow local policies that require additional process steps and time, including consultation with employee representative bodies. We will communicate with affected employees in other regions in accordance with these policies and timelines. We recognize that this news is important to all of our team members and therefore we want to provide you with additional context on both the decision to eliminate positions and how we are supporting our affected colleagues.
As Andy shared a few weeks ago, throughout the 2023 planning process, we have carefully prioritized resources with a view to maximizing customer benefits and the long-term health of our business. For Ads, this process involved reallocating resources by moving team members, slowing down or stopping certain programs, or concluding that we didn’t have the right skills in place to meet our priorities. As a result, we made well-considered decisions on how best to move forward, which resulted in job cuts for a small percentage of our organization.
Above all, I want to acknowledge and thank our relevant colleagues for the work they have done on behalf of Amazon Ads customers. Our immediate goal is to support our team members through this difficult transition and, to that end, employees whose roles have been eliminated will have a personal follow-up meeting with a leader of their team explaining the next steps. Affected individuals will receive full pay and benefits for the next 60 days (90 days if in New York and New Jersey), plus additional severance pay and outplacement assistance to help them find their next role outside of Amazon.
Looking ahead, I remain very optimistic about the opportunities ahead of us, even in an uncertain economic environment. We have built a solid foundation and I am personally very excited about the invention and construction that is happening in our organization. I also want to thank each of you for showing empathy and support during this time. Please contact your team leaders or MyHR with any questions.
SHOW: Watch CNBC’s full interview with Amazon CEO Andy Jassy on message to investors, new AI tools and stock price