Company lets go of some employees in advertising

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Amazon on Tuesday began laying off some employees in its advertising as part of CEO Andy Jassy’s effort to rein in costs, the company confirmed.

Paul Kotas, Amazon’s senior vice president of advertising, IMDb and Grand Challenge, sent a note to staffers informing them of the layoffs, according to a copy of the memo shared by an Amazon spokesperson.

“As Andy shared a few weeks ago, throughout the 2023 planning process, we’ve been scrupulously prioritizing resources with an eye toward maximizing benefits to customers and the long-term health of our business,” Kotas wrote. “For Ads, this process has involved reallocating resources by shifting team members, slowing down or stopping certain programs, or concluding we didn’t have the right skills in place to address our priorities. As a result, we have made deeply-considered decisions about how best to move forward, resulting in role eliminations for a small percentage of our organization.”

The company started notifying workers they were being let go via email Tuesday morning, according to two affected employees. These people requested anonymity because they weren’t authorized to speak on the matter.

In an email to affected employees, Amazon said the layoffs will begin June 20, or July 17 if affected workers live in New York and New Jersey, after a 60 to 90 day transition period, during which they’ll be given the opportunity to search for another role inside the company.

It’s unclear how many people are being let go across the advertising unit. Jassy last month announced Amazon would lay off 9,000 employees, on top of the 18,000 cuts already announced last November and in January. The earlier cuts were primarily focused in retail, devices, recruiting and human resources groups.

In March, Jassy said the latest round would affect employees in Amazon’s advertising, cloud computing, Twitch livestreaming and human resources divisions. Earlier this month, roughly 100 employees were also laid off in Amazon’s video games business.

Amazon is undergoing the largest layoffs in its 29-year history after it went on a hiring spree during the Covid pandemic. The company’s global workforce swelled to more than 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019.

Jassy is also taking on a broad overview of the company’s expenses as it reckons with an economic downturn and slowing growth in its core retail business. Amazon froze hiring in its corporate workforce, axed some experimental projects and slowed warehouse expansion.

By announcing layoffs in ads and Amazon Web Services, Jassy has shown that two of Amazon’s biggest and most profitable businesses aren’t immune to the cost cutting.

Here’s the full memo from Kotas:

Hi Everyone,

I wanted to share that this morning we took the difficult step of informing Amazon Ads team members who were impacted by role reductions in the U.S. and Canada. In other regions, we are following local policies which require additional time and process steps, including consultation with employee representative bodies. We will communicate with affected employees in other regions in accordance with those policies and timelines. We recognize that this news is significant for all our team members and, therefore, want to provide you with additional context on both the decision to eliminate roles and how we are supporting our impacted colleagues.

As Andy shared a few weeks ago, throughout the 2023 planning process, we’ve been scrupulously prioritizing resources with an eye toward maximizing benefits to customers and the long-term health of our business. For Ads, this process has involved reallocating resources by shifting team members, slowing down or stopping certain programs, or concluding we didn’t have the right skills in place to address our priorities. As a result, we have made deeply-considered decisions about how best to move forward, resulting in role eliminations for a small percentage of our organization.

Importantly, I want to acknowledge and thank our impacted colleagues for the work they have done on behalf of Amazon Ads customers. Our immediate focus is supporting our team members through this difficult transition and, to this end, employees whose roles were eliminated will have a personal follow-up meeting with a leader from their team explaining next steps. Those affected will receive full pay and benefits for the next 60 days (90 days if in New York and New Jersey), plus an additional severance package and outplacement support to help with finding their next role outside of Amazon.

Looking ahead, I remain very optimistic about the opportunities in front of us, even in an uncertain economic environment. We’ve built a strong foundation and I’m personally very excited by the invention and building happening across our organization. I also want to thank each of you for showing one another empathy and support during this time. Please reach out to your team leaders or MyHR with any questions.

Paul

WATCH: Watch CNBC’s full interview with Amazon CEO Andy Jassy on message to investors, new AI tools and stock price

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