Andy Jassy, chief executive officer of Amazon.Com Inc. (Photographer: David Ryder/Bloomberg)
Amazon announced in a blog post on Wednesday that it will be conducting layoffs. The job cuts were predominantly focused on the Devices and Services division and will impact white-collar workers. The retailing giant will separate a reported 10,000 employees from payroll, according to the New York Times. Foreshadowing what was coming next, human resources was also part of the layoff. When HR people are downsized, it's a harbinger of future layoffs and hiring freezes.
One day later, CEO Andy Jassy warned employees in a corporatewide memo, “There will be more role reductions as leaders continue to make adjustments.” Jassy added that managers would be reviewing their teams and scrutinizing “workforce levels” to make the difficult decisions of who will stay or be asked to leave for the “long-term health” of the company.
Jassy did not qualify the number of people who will be let go in 2023. To keep workers informed, the CEO said in the memo that leaders will “communicate to their respective teams when we have the details nailed down,” and empathetically tell the impacted parties before the press reports it.
The Fear Of Uncertainty
Jeff Bezos’ successor is faced with the unpleasant task of recalibrating the headcount to an appropriate level after years of aggressively hiring. The pandemic accelerated the broad adoption of eCommerce and purchasing items online.
In 2022, the economy started losing its luster. The trillions of dollars that flooded into the market to stimulate and keep alive the U.S. economy resulted in 40-year record high levels of inflation and higher interest rates that caused a slowdown and deteriorating circumstances.
Jassy acknowledges that the uncertainty is challenging for the staff and decision-makers, stating, “It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions and responsibilities whose lives will be impacted.”
The company will offer impacted professionals the opportunity to find new roles within the organization and provide packages, including separation payments and health insurance benefits.
The Unintended Consequences
While the memo was meant to offer a transparent assessment of the situation of the white-collar workforce, there will be unintended consequences. When the sword of Damocles hangs over your head, it's hard for people to do their best work.
The chaotic manner in which “chief twit” Elon Musk is summarily laying off workers for saying negative comments about him, demanding a “hardcore” commitment to the company and a take-it-or-leave-it approach to jobs, is prodding people to leave.
If you are a multibillionaire, you don’t have to worry. However, professionals at Amazon or Twitter, even if they are highly compensated, are concerned about their financial situation.
There will be an oversupply of job hunters. More than 130,000 workers have lost their jobs in tech and startups in 2022. Hiring freezes and rescinding job offers are now common. The sharp plunge in the value of tech workers’ RSUs and company stock dashed hopes of building wealth.
When you know that there is a chance of being shown the door, it harms your mental health, emotional well-being and overall productivity. You can't do your best work when you are constantly worried that your boss or HR will call you into a meeting and relay the bad news of being let go.
Rumors will circulate. Co-workers will become more competitive to make themselves get noticed. As time goes on, tempers will flare as everyone is anxious about whether or not they’ll still have a job tomorrow. The environment becomes so toxic as everyone is jockeying to keep their jobs and hoping their colleagues make mistakes, so they’ll be selected for firing instead.
The best and brightest will be the first to leave. There will be a brain drain as headhunters swoop in on the A-players and entice them to switch jobs, pointing out the risks of staying and losing their job. The high performers know that they are in high demand. Companies will seek them out and offer higher compensation and job title to recruit them.
Since the future is unknown, it's self-preservation for workers to start updating their résumés and LinkedIn profiles, getting in touch with recruiters and searching job boards. The attention to looking for a new job will take away time from the remaining employees doing their jobs. This will happen en masse and be problematic for the company.
Announce All The Job Cuts At Once
An unclear forecast of how many people will be let go, the time frame when this will occur and the types of jobs slated for cutting will do a disservice to existing employees. The slow and tortuous drip of continual job cuts wreaks havoc on people's psyches.
Jassy should make the tough call and announce a large one-and-done layoff. It will be painful at first, but in the long run, it's more humane. Everyone will know where they stand and can move on with their lives.
