Amazon 2023 layoffs: What to know as AMZN plans more job cuts

As a paradigm-shifting e-commerce and technology giant, Amazon (NASDAQ:AMZN) often makes the headlines. However, the latest news involving a 9,000 employee downsizing was not the development management had hoped for before the equity sector collapsed throughout 2022. With fears of a deepening recession, many investors dumped AMZN shares amid layoffs from Amazon.

Amazon CEO Andy Jassy announced the downsizing in a memo to staff on Monday, according to the Associated press. Notably, the 9,000 employees affected are in addition to the 18,000 workers the company said it would lay off in January. In the memo, Jassy noted that the second phase of the company’s annual planning process — which involved identifying business units to cut — ended this month.

According to the wall street journalJassy defended the move as necessary in the environment AMZN stock found itself in. “said Jassy.

However, it is important to note that Amazon’s layoffs do not imply the elimination of all components of its business. According to Jassy, ​​the tech giant will still hire in certain strategic areas.

Amazon layoffs may confirm recession pressures

In many cases, job cuts generate upward mobility in the publicly traded shares of the underlying companies. However, Amazon’s layoffs did not provide such a fortune, with its market value obviously collapsing. Likely, negativity surrounds growing fears of a recession.

On the one hand, like the PA pointed out, the latest round of job cuts “will hit profitable areas for the company, including its AWS cloud computing unit and booming advertising business. Twitch, the Amazon-owned gaming platform, will also see layoffs as well as Amazon’s PXT organizations, which handle human resources and other functions.

Additionally, Amazon’s layoffs appear aligned with a slowdown in demand. Speak WSJ, Brian Olsavsky, chief financial officer of Amazon, said the e-commerce company has seen a slowdown in AWS spending. The culprit centered on customers looking to control costs.

Additionally, Amazon’s advertising business – which has become a more integral sales driver – experienced a slowdown in the fourth quarter. Simply put, Amazon’s layoffs stem from fundamental headwinds that justify the decision to downsize.

Worse still, many other tech companies have announced deep cuts. According to Layoffs.fyi, a site tracking tech industry job cuts, companies in the sector have laid off about 300,000 workers since 2022. Unfortunately, the issues that led to Amazon’s layoffs could be systemic. If so, there may be nothing management can do but try to ride out the storm.

why is it important

Amid the fallout from the banking sector, all eyes will be on the Federal Reserve. Theoretically, the central bank can temporarily backtrack to protect banking stability and confidence. However, economic experts still expect the Fed to proceed with rate hikes. If so, this dynamic could add more pressure on AMZN stocks and its ilk.

As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.