business news in context, analysis with attitude

From the Seattle Times:

"Amazon confirmed Wednesday it has begun laying off employees in its devices organization, the start of a string of job cuts that will likely impact around 10,000 workers in devices, retail and human resources … Amazon began making cuts in its devices division Tuesday, after news of the coming layoffs broke on Monday. The company confirmed the layoffs in a blog post on Wednesday.

"'After a deep set of reviews, we recently decided to consolidate some teams and programs,' Dave Limp, senior vice president of devices and services at Amazon, wrote in the post. 'One of the consequences of these decisions is that some roles will no longer be required.'

"'It pains me to have to deliver this news as we know we will lose talented Amazonians from the Devices and Service org as a result,' he continued.

"The devices organization includes Amazon’s voice assistant Alexa, as well as Kindle, smart home products, Echo speakers, its health device Halo and its home robot Astro."

From CNBC:

"'Voluntary severance' offers were sent out Tuesday and Wednesday to some divisions, including human resources and employee services, according to internal company documents viewed by CNBC.

"In exchange for leaving the company, Amazon will provide employees with a 'lump-sum' severance payment equal to three months of pay, plus one week of salary for every six months of tenure at the company, the documents said. Employees will also be given a weekly stipend for 12 weeks, which can be used to offset COBRA premiums, and their insurance will continue through the end of December.

"Employees have until Nov. 29 to resign, and they have until Dec. 5 to withdraw their application if they change their mind, the documents said. Amazon will inform employees next month that their resignation has been accepted, and their last day of employment will be Dec. 23.

"The volunteer severance program is a 'first step' to realign businesses within Amazon, the documents said, indicating that the divisions could undergo layoffs in the near future."

And from Fortune:

"Amazon Web Services, the cloud computing subsidiary of Amazon, is asking managers to weed out underperforming workers on teams that have grown too fast, and will extend a hiring freeze across the organization into the first quarter of 2023 as the business seeks to keep costs in check amid slowing growth.

"In a meeting this week, numerous AWS managers were informed that a hiring freeze that began earlier this month would continue into the first three months of the new year, but that layoffs were not currently planned at AWS, according to a person with knowledge of the matter. The lack of layoffs was greeted with relief by some AWS insiders, given the recent news that parent company Amazon was eliminating roughly 10,000 jobs across its retail and devices operations, as well as in human resources.

"Some AWS teams may still shrink however, as the business takes steps to reduce staffing levels in groups that are currently above their headcount targets for the year. Managers of such teams are expected to 'fix' the situation by the end of Q1 next year by managing out low performers through performance improvement plans, attrition, and other means, the person told Fortune."

Fortune also writes that "in an effort to cut back on costs, Amazon has already been axing some of its projects — including subsidiary, Amazon Care, and the cooler-size home delivery robot Scout. Its also been scaling back its physical footprint by delaying — or canceling — plans to occupy some new warehouses across the country. And Amazon Chief Financial Officer Brian Olsavsky has said the company was preparing for what could be a slower growth period and would be careful about hiring in the near future."

KC's View"

Note:  Amazon has some 1.5 million employees globally, and Amazon increased its total labor headcount by five percent over the past year.  A 10,000-person layoff is considerable - and especially painful to those who are being cut (I'm very sensitive to this, having been laid off four times in my life) - but it would be a mistake to think this is eviscerating Amazon's workforce.

"Realign" is one word.  "Rightsize" would be another.  So much of this, it seems to me, is about getting the company back to early pandemic staffing levels, before Covid sent so much of the e-commerce business into overdrive to meet consumer demands and needs.

This was, let's remember, an article of faith at Amazon, which has built a business and culture on being customer-centric.  At a time of greater need, it would've been a violation of its core values not to build out.  It created pain of one kind, and now is creating pain of a different sort.  But, as they say, no pain, no gain.  That's an important thing to keep in mind - in the end, this will be all about positioning Amazon to continue to grow, to dominate, to become inextricably intertwined in every facet of our lives. Nothing about that vision has changed.

I'd recommend you check out this week's Innovation Conversation between Tom Furphy and me, in which we discuss this issue, among others.

By the way … one of the things I wrote when the Amazon layoffs first became public is that this is a great opportunity for companies to improve their bench strength - if you want to improve your technology offering, finding some smart former Amazon employees is hardly the worst ideas in the world.

Which made this story from The Information yesterday resonate:

"When Elon Musk bought Twitter and cut half its workforce earlier this month, TikTok’s in-house recruiters approached some of the laid-off software engineers about joining the viral video app’s Silicon Valley office. Then last week, the same recruiters contacted some of the engineers cut by Meta Platforms."

One would imagine that TikTok - which wants to improve its e-commerce footprint - will also be contacting some of the Amazonians suddenly looking for jobs.

Probably a good time to be a person with a) Amazon on your resume, and b) the right skills for e-commerce.  Also a good time to be an executive recruiter.