Amazon’s relatively new chief executive, Andy Jassy, has laid off another 9,000 people, bringing the total since his tenure began to 27,000. Jassy kept his job, although he clearly has sunk the amazing company that founder Jeff Bezos built. Jassy has failed at every turn and decided to take it out on his workers. (Here are the industries laying off the most workers.)
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Jassy was head of the highly profitable Amazon Web Services. Bezos should have kept him there. He has all but dismantled Amazon’s original and larger e-commerce business. He overextended distribution at a time when sales started to flatten and the online segment began to lose money.
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The layoffs also show a lack of imagination. They are a sign Jassy does not plan to expand rapidly to another business. With its size and scale, Amazon should be more than just an e-commerce and cloud business. It should, in profile, look more like Microsoft.
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Jassy wrote to employees that Amazon was too badly run to need them. He partially blamed the economy: “Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount.”
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Amazon has a basic problem that Jassy has been unable to overcome. It is no longer taking market share in its dominant business, e-commerce. Amazon’s forecast for the current quarter is that revenue will be between $121 billion and $126 billion, up between 4% and 8% over the same period a year ago. Since AWS continues to grow, e-commerce revenue must be dropping. Amazon also forecast an operating income of $0 to $4 billion, compared to $3.7 billion last year. Once again, AWS is growing, which means e-commerce is in trouble.
Jassy was arrogant to believe he could time the e-commerce market, and it has cost 27,000 people their jobs.
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