Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) will lay off an extraordinarily high number of 18,000 people. This occurred when Wall Street gave up on the tech giant, collapsing its shares by over 50% in the past year, during which Andy Jassy ran the company.
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Jassy blamed the firings on the economy, which is only partially true. He has to take a substantial part of the blame. He wrote, describing the problem, “Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so.” (See which American tech giants laid off the most employees last year.)
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One term used by large tech companies when they have cut jobs recently is “overhired.” Marc Benioff, the CEO of Salesforce, stated during its downsizing, “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.” Like Jassy, he will keep his job and likely will make several million dollars in 2022 compensation, which will be evident when the companies file their proxies.
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Amazon’s problem was first evident when it announced its third-quarter earnings. Both its huge North American e-commerce business and international e-commerce operation lost money. The company’s bottom line was saved by the success of Amazon web services, the company’s cloud computing operations.
A UBS analyst recently posted worries about Microsoft’s cloud operations, warning that Amazon may hit the same problems.
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Jassy was left in control of Amazon when founder Jeff Bezos decided he wanted to live a life not controlled by his work at Amazon. The handoff occurred on July 5, 2021. Bezos’s mistake was to promote someone who did not have the strategic sense to keep Amazon’s expenses in check. His decisions have been crippling, and thousands of workers have paid the price.
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