Tuesday, February 13, 2018
SEATTLE -- Amazon is cutting hundreds of corporate positions, a rare move for a company that has spent most of the past few years in a frantic growth spurt.
The job cuts, underway now, will fall on several hundred employees at the online retailer's Seattle headquarters, along with hundreds more elsewhere in Amazon's global operations, one person familiar with the cuts said. The cuts are primarily focused on Amazon's consumer retail businesses, according to two people familiar with the matter.
A few hundred job cuts are modest for a company that is now the second-largest U.S.-based corporate employer and pale in comparison to adjustments in recent years that saw Microsoft and Boeing eliminate thousands of jobs in a single drive.
Amazon counted 566,000 total employees at the end of 2017, up 66 percent from the previous year due largely to its acquisition of Whole Foods.
But at Amazon, a company with a wide range of growing businesses that prides itself on frugality and efficient allocation of resources, broad job losses of any kind are rare.
The cuts come after a hiring binge that took the company's Seattle head count to more than 40,000 people, from just 5,000 in 2010.
According to several employees, the rapid growth of the past two years left some units over budget and some teams with too much staff for their work. Amazon had implemented hiring freezes in recent months across several groups, a move that reduced the company's open job listings in Seattle to their lowest level in years.
In a statement, Amazon acknowledged the cuts.
"As part of our annual planning process, we are making head count adjustments across the company -- small reductions in a couple of places and aggressive hiring in many others," a spokesman said. "For affected employees, we work to find roles in the areas where we are hiring."
Some employees have already been informed of the elimination of their roles, and layoffs are expected to be completed in the next few weeks, one of the people said.
Amazon is automating tasks such as forecasting demand for new products and negotiating their prices, said Michael Lagoni, chief executive officer of Stackline, an e-commerce data analytics firm that helps brands and manufacturers sell on Amazon.
For instance, someone selling televisions would have to call an Amazon buyer, show them the product and negotiate terms for selling it on the platform. Now, those functions have been mostly automated, Lagoni said. Amazon is also making manufacturers and suppliers do more work -- such as coordinating marketing and promotions -- things that Amazon used to handle internally, he said.
Recent cuts at Amazon units outside Seattle suggest the company is consolidating established retail businesses.
Self-publishing unit Createspace is conducting its second round of cuts in two years, cuts that eliminated 200 jobs from the South Carolina-based Amazon subsidiary. In Las Vegas, Amazon-owned footwear seller Zappos has laid off about 30 people. And a year ago, Quidsi, the subsidiary behind Diapers.com and other sites, cut more than 250 jobs.
The company continues to hire plenty of workers, too. Counting only corporate roles outside of Amazon's warehouses, the company had 12,500 open jobs on Monday.
Amazon's job listings in its hometown have climbed in recent weeks, as executives approved plans for 2018, and granted teams -- particularly those in the Amazon Web Services cloud computing unit and working on voice-activated Alexa software -- permission to hire.
The company on Monday had more than 4,000 job listings posted for Seattle, up 23 percent from the multiyear low in January. In comments earlier this month, Chief Executive Jeff Bezos said the company was going to "double down" on Alexa following better-than-expected success from its voice-activated software.
Still, some Seattle-based employees describe an environment of belt-tightening.
A manager in one unit making cuts said his team was briefed that Bezos and the Amazon brass wanted to put more pressure on managers to weed out lower performers and enforce spending discipline after the rapid growth of recent years.
"People are in terrible shape," he said. "There is so much stress on campus."
The company has also recently instituted a mandate that managers who oversee other supervisors must have at least four people reporting to them. The aim, the company says, is to reduce layers of redundant management and keep the company flexible and fast-moving.
"Amazon has a problem right now with overpopulation," said one engineer at the company.
In addition to the company's annual planning and budgeting process, the first few months of the year also bring Amazon's employee performance reviews and, for some, notices that they need to improve or face consequences.
Such performance improvement plans, dreaded among Amazon's rank and file, come with a requirement that employees demonstrate improvement over a set period of time. Last year, Amazon introduced a career coaching program, called Pivot, described as a tool to help lower performers make it through such programs.
Employees put on notice can also choose to contest their manager's determination that led them into the improvement plan in the first place, or opt not to participate at all and take a severance package to leave the company.
Some current and former employees say that some managers wield improvement plans to trim the size of teams without resorting to layoffs.
Amazon says improvement plans are not used to achieve job cuts.
"We use our performance-management process to recognize talent, help employees develop their skills, and in some cases, make employees aware that they are underperforming," a spokesman said. "We do not use our performance management process to achieve head-count goals."
Information for this article was contributed by Bloomberg News.
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