Amazon layoffs hit its advertising unit

On Tuesday, Amazon initiated layoffs within its advertising division as part of CEO Andy Jassy’s efforts to control costs.

It is unclear exactly how many employees in the ads division will be affected.

What’s happening. Amazon is currently experiencing the largest layoffs in its 29-year history, following a hiring surge during the Covid pandemic. Amazon’s global workforce grew to over 1.6 million by the end of 2021, up from 798,000 in the fourth quarter of 2019.

The aftermath. As a result of the recent layoffs, Amazon will reallocate resources, which include shifting team members, slowing down or stopping certain programs, and recognizing the need for different skill sets to address priorities. Consequently, role eliminations occurred for a small percentage of the organization. Affected employees were notified via email on Tuesday morning, with the layoffs scheduled to commence on June 20, or July 17 for workers in New York and New Jersey, following a 60- to 90-day transition period.

Transitioning to other roles. During this transition period, affected employees will have the opportunity to search for another role within the company. The exact number of layoffs within the advertising unit remains unclear. Last month, Jassy announced that Amazon would lay off 9,000 employees in addition to the 18,000 cuts previously announced in November and January. Those earlier layoffs primarily targeted retail, devices, recruiting, and human resources groups.

Jassy is also examining the company’s expenses on a larger scale as it faces an economic downturn and slowing growth in its core retail business. Amazon has frozen hiring within its corporate workforce, discontinued some experimental projects, and slowed warehouse expansion. By announcing layoffs in the advertising and Amazon Web Services divisions, Jassy has indicated that even Amazon’s largest and most profitable businesses are not exempt from cost-cutting measures.

What Amazon said. In a memo sent to staff, Paul Kotas, Amazon’s Senior Vice President of Advertising, IMDb, and Grand Challenge, informed employees of the job cuts. The memo emphasized that throughout the 2023 planning process, Amazon has been rigorously prioritizing resources to maximize customer benefits and ensure the long-term health of the business.

“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 Kotas, Amazon senior vice president of advertising, IMDb and Grand Challenge

Layoffs hitting the tech industry hard. Meta also announced its own plans to lay off employees across Facebook, Instagram, Reality Labs, and WhatsApp starting today. Meta employees in North America were notified by email between 4 am to 5 am PT Wednesday morning. Outside of North America, the timelines will vary country to country, and some countries will not be impacted.

Why we care. Aside from Layoffs signal a shift in the Amazon’s priorities and resource allocation. These changes could impact the advertising landscape on the platform, affecting the tools, services, and opportunities available to advertisers.

Additionally, getting laid off from a job is never easy. The affected individuals from Amazon, Meta, Google, and all of the other tech companies going through tough times, have valuable experience and expertise within the ad industry. Hopefully, their insights and skills will be an asset to other companies looking to strengthen their advertising teams.

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