Pressured by economic uncertainty, Amazon is freezing hiring for its corporate workforce “for the next few months,” the company announced Thursday.
The news comes after weeks of Amazon hinting it will slow growth and slim down experimental ventures and projects. Amazon said Thursday its decision is due to the economy and “in light of how many people we have hired in the last few years.”
Amazon declined to answer questions about how the hiring freeze would impact its workforce in the Puget Sound. The company has 55,000 employees in Seattle and has been on a hiring spree outside the city, aiming to grow its Bellevue presence from 10,000 employees to 25,000 in the next three years.
Amazon already has paused hiring in its corporate retail division, which includes online and physical stores, its marketplace for third-party sellers and its Prime subscription service. The company also reportedly stopped hiring for its advertising business and at Amazon Web Services, its cloud computing arm and one of the most profitable parts of the company.
The freeze has now expanded to “other businesses,” Beth Galetti, senior vice president of people experience and technology, wrote in a message shared with employees Wednesday and posted publicly Thursday.
“We anticipate keeping this pause in place for the next few months, and will continue to monitor what we’re seeing in the economy and the business to adjust as we think makes sense,” Galetti wrote.
Over the last decade, Amazon’s growth has shaped development in downtown Seattle as it attracted thousands of workers and other companies opened offices next door in the search for fresh talent. The hiring freeze, which follows a pandemic hiring spree, could slow that growth.
“This is a foreboding sign for the industry and for others trying to make sense of where things are headed,” said Jeff Shulman, a marketing professor at the University of Washington who has studied Amazon’s growth in Seattle.
Amazon’s announcement comes as many other tech companies are reevaluating their ranks. Stripe announced Thursday it is cutting its workforce by 14%. Lyft said the same day it’s slimming down by 13%. Microsoft already announced two rounds of layoffs this year and reported its slowest growth in five years on an October earnings call. Meta plans to cut its headcount for the first time in company history and Alphabet, Google’s parent company, has said since July it will cut back on hiring for the rest of the year.
“We’re seeing the tech industry is quite skittish. When there’s a lot of uncertainty, as there appears to be now, many companies are being risk-averse,” Shulman said.
A lot of companies watch to see what Amazon does before making their own move, Shulman said. Amazon’s decision to allow employees to work remotely at the start of the pandemic started a “cascading effect” of remote work, he said.
Now, if companies were already risk-averse, Shulman expects Amazon’s decision to pause hiring will make them even more skittish.
Amazon has also begun shutting down some projects, including two robotics experiments, a virtual travel experience, a video device for kids and personal delivery robots. This week, it ended its Treasure Truck program, a fleet of roving vans that offered daily discounts on an ever-changing list of items, from steaks to board games to paddleboards.
Earlier this year, the company announced the end of its health care venture, Amazon Care, because it wasn’t the “right long-term solution for our enterprise customers,” according to Neil Lindsay, senior vice president for Amazon Health Services.
“There are very real economic uncertainties swirling for many of our industries,” Rachel Smith, president and CEO of the Seattle Metropolitan Chamber of Commerce, said Thursday in response to the news. “The factors impacting our ability to do business are significant, resulting in – among other things – a tech sector that is tapping the brakes.”
Policy makers should not “watch passively from the sidelines,” Smith continued, but should be working to attract job seekers to build the tax base Seattle’s government relies on and grow jobs that drive the economy.
Amazon said Thursday it intends to hire a “meaningful number of people” in 2023. It will hire to replace departing employees “depending on the business or area of the company,” Galetti wrote.
There are some “targeted places” where Amazon plans to continue hiring incrementally, she added, and the company remains excited about some new initiatives, including Prime Video, Alexa, grocery, health care, its satellite division Kuiper and its self-driving division, Zoox.
“While we have had several years where we’ve expanded our head count broadly, there have also been several years where we’ve tightened our belt and were more streamlined in how many people we added,” Galetti wrote.
Amazon hinted at its slowdown on a call with investors earlier in October to report its third-quarter financial results.
Chief Financial Officer Brian Olsavsky told investors Amazon “is taking action to tighten our belts, including pausing hiring in certain businesses and winding down products and services where we believe our resources are better spent elsewhere.”