Online retail giant Amazon unexpectedly announced 14,000 job cuts earlier last week. This massive round of layoffs follows other significant redundancies in recent years:
- January 2023: 18,000 people laid off.
- March 2023: another 9,000 people let go
- November 2023: hundreds of people let go inside the Alexa team, as Amazon was looking to shift Alexa more toward GenAI
- April 2024: hundreds of people let go from AWS
Software engineers, unfortunately, seem hit hard by the latest layoffs: of 2,300 employees laid off in Washington State, 25% are software engineers, GeekWire reports. We can only speculate about the ratio across the rest of the company, but if cuts at HQ are heavy on engineering, then things don’t look promising for other locations, sadly.
The memo from Beth Galetti, Senior Vice President of People Experience and Technology, to workers didn’t explain much:
“Some may ask why we’re reducing roles when the company is performing well. Across our businesses, we’re delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones). We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.”
The statement is utterly confusing, as encapsulated by its message that “business is great, but we need to do layoffs”. Job cuts usually mean a business is in trouble, which obviously isn’t the case for Amazon. So, why are these layoffs really happening?
Layoffs to boost efficiency?
The company’s memo states:
“We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.”
If this line of reasoning sounds familiar, it’s because most of the layoffs in 2023 were justified the same way. The tech industry overhired during the pandemic in 2020-2021, making orgs more bloated and decision-making slower. In February 2023, I reported on the trend of fewer middle managers, with Meta the first Big Tech giant to reduce its management layers. In 2023, most of Big Tech followed this approach with layoffs or reorgs. Managers acquired more reports, and tech companies cut down the number of layers between the CEO and individual contributors.
Given Amazon did other massive layoffs in 2023, it’s unlikely they missed the industrywide trend for fewer managers. While the current layoffs seem