Amazon.com Inc. (NASDAQ: AMZN) CEO Andy Jassy suggested he will gut the cloud and e-commerce employee base beyond the 10,000 people he has pushed out into the economic winter. Although other tech layoffs have been tough for workers, Jassy’s decision to make the announcement so far ahead of his 2023 plans will strip many employees of their morale.
[in-text-ad]
“I’ve been in this role now for about a year and a half, and without a doubt, this is the most difficult decision we’ve made during that time,” he said to The Wall Street Journal. Oddly, he will not be one of the people to go. Jassy has bungled his time as chief executive so badly that it is a shock he gets to keep his job.
Some of the cuts are key to Amazon’s immense e-commerce business. These include those in the consumer electronics and retail businesses. The strategy of culling projects like Alexa is dangerous because they give Amazon a distinct sales advantage over other retailers, even though it loses money.
Like many other flat-footed CEOs, Jassy did not see the downturn coming. He also missed what would be the critical transition from a COVID-19-driven economy to one where most Americans do not fear for their daily health. Amazon became overbuilt and did not create a plastic process to mold itself to the economy as it changed.
Some of the problems Amazon has had belong to founder Jeff Bezos. He not only picked Jassy but also allowed him to make a series of mistakes that were not necessary.
Wall Street lost confidence in Jassy several months ago. The market is off 28% this year but Amazon stock is down 43%. Investors are rarely wrong about companies as huge as Amazon. There are too many eyes on every part of the company to miss substantial trouble.
Amazon remains one of America’s great companies and among the most important ones founded in the past half-century. It turned the entire retail industry upside down. Walmart is the only brick-and-mortar retailer that still competes with it on an equal footing.
The undermining of the success of Amazon’s e-commerce business leaves it vulnerable to becoming a one-division company, at least in terms of operating income. AWS should not have to carry that much water.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
