Amazon CEO Andy Jassy said on Wednesday that an “uncertain” economy had prompted the e-commerce giant to press ahead with rare and wide-ranging layoffs after it carried out a major wave of job losses. hiring during much of the pandemic.
“We had the target for a very uncertain economic environment, as well as our very aggressive hiring over the past few years,” Jassy said in an interview at the New York Times DealBook Summit on Wednesday. “We just felt we had to streamline our costs.”
The remarks came as part of Jassy’s first interview since Amazon (AMZN) confirmed earlier this month that it had started laying off company employees, with plans for the layoffs to continue early next year. The company plans to cut up to 10,000 employees, although it has not confirmed a figure.
Amazon, more than most tech companies, has had a staggering pandemic boom as more customers shifted their spending online during the health crisis. Like other tech companies, it has since changed course and started to downsize as it faces shifting demand as well as rising inflation and fears of recession.
“A lot of things have happened in the last few years that I’m not sure people anticipated,” Jassy said. “You just look at 2020, our retail business grew 39% year-over-year, at an unprecedented $245 billion annual rate, and that forced us to take decisions at that time to spend a lot more money and go a lot faster in building infrastructure than we ever imagined.
“We built a 25-year physical distribution center footprint that we doubled in 24 months,” Jassy said.
Even so, Jassy said he believes the team “made the right decision” about building their infrastructure. As for the hiring spree, Jassy said he now sees it as a “lesson for everyone.”
“I don’t necessarily think it was a bad thing to have doubled down, because we were growing so well and we had so many ideas that we thought were good for the customers and good for the business, but I think it’s a good lesson, I think, for everyone,” Jassy said. “When you’re hiring, even when things are going great, it’s good to think about a sudden change, even one that you’ve had a little Hard to imagine. Would you like the extra staff you’re adding at this point, or do you want to be a little more conservative?”
As Jassy spoke, Amazon warehouse workers who helped organize the company’s first-ever U.S. union at a Staten Island factory gathered in the rain outside the venue to protest the appearance of their managing director in New York.
Despite the union’s historic victory in April, Amazon has so far refused to officially recognize the rank-and-file group known as the Amazon Labor Union, or come to the bargaining table. The company vigorously opposed the workers’ victory through the National Labor Relations Board (NLRB).
While the NLRB battle indicates the union is close to being certified, Jassy suggested Amazon’s legal battle with the labor group isn’t over yet. He said “there were a lot of irregularities in that vote,” which is why the company filed objections with the NLRB. (Amazon’s objections were previously overruled by an NLRB hearing officer.)
Jassy also pointed out that Amazon’s last two union elections resulted in workers voting not to unionize, and that Amazon prefers to have a direct relationship with fulfillment center employees rather than going through unions.
“In my opinion, where we are with this legal process is that we are far from done,” Jassy said. “I think this is going to work its way through the NLRB, the NLRB is probably unlikely to rule against itself, and it has a real chance of ending up in federal court.”
In an interview with CNN Business prior to Jassy’s remarks, Amazon union president Chris Smalls said Jassy “even had the audacity to feel comfortable coming to New York knowing that we hadn’t negotiated anything yet”.
“We absolutely want to take this opportunity to let him know that the workers are waiting and that we are ready to negotiate our first contract,” he added of the demonstration, which he described as “a welcome party. ” for Jassy.
Smalls said he was contacted by a few terminated Amazon employees in positions at the company, who have since become interested in union protections. “I tell them – you can have good pay, you can have good benefits, you can have good inventory and good benefits, obviously better than warehouse workers, but at the end of the day, you’re still an employee. at will,” says Smalls.
“I explained to them that the only building that cannot be affected right now by mass layoffs is JFK8 Staten Island,” he said. “I encourage them to do what they have to do, if that means forming a union, too bad, we support it.”
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