Amazon’s Layoff Texts and Email to Employees
Students can analyze Amazon’s layoff email against principles for delivering bad-news messages. Let’s look at the reasons given for the downsizing and what the Economist called the “impersonal text-message blast.”
As always, context is important. In this case, the planned layoffs are not news to employees, as it’s not news to anyone who has seen the media reports about 30,000, about 10%, planned cuts. This week, 14,000 were laid off.
For the communication, this means that the Amazon statement, posted on the website for the public, is not delivering the news for the first time. Students will note that two previous messages (from last year and earlier this year) are linked to illustrate to employees—and the critical public—that they had ample warning. Still, of course, employees are feeling the pain.
In her email, Beth Galetti, Senior Vice President of People Experience and Technology, addressed the reason by first acknowledging skepticism:
Some may ask why we’re reducing roles when the company is performing well. Across our businesses, we're delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it's enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones). We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.
CEO Andy Jassy also said the decision is not “really” financially or AI driven:
The announcement that we made a few days ago was not really financially driven, and it’s not even really AI driven—not right now, at least. Really—it’s culture.
If you grow as fast as we did for several years . . . you end up with a lot more people than what you had before, and you end up with a lot more layers. . . . When that happens, sometimes without realizing it, you can weaken the ownership of the people that you have who are doing the actual work.
We could argue that all decisions for a for-profit corporate are ultimately financially driven. Why do culture and too many layers matter? Why do they need to be more “nimble”? Sure, they want to make quicker decisions and get the right products to the right customers as quickly as possible (same-day paper towels!), but in the end, doesn’t that all serve the bottom line? Do they solely want people to feel “ownership” over their work?
Neither Galetti or Jassy say it explicitly, but AI might be replacing some of these roles. In a June email, Jassy wrote,
As we roll out more Generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs. It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.
Understandably, this talk makes people more nervous than they already are. But to not attribute some job loss today to AI seems inconsistent and dishonest.
Another business communication issue worth a class discussion is how some of the layoffs were communicated: through text message. These messages are highly criticized in an Economist article, but that might not be fair. First, we should consider how employees typically receive communication, which may be by text, particularly remote employees. Second, two messages ask them to check their email, and then, call the help desk if they didn’t receive an email, so the news isn’t actually delivered via text. Even more than email, texts are efficient methods to get a consistent message out to many people at the same time. The company is balancing compassion with fairness in addition to efficiency.
Students might conclude that texts are the best possible option. It’s simply not practical for managers to meet with 14,000 at the same time and deliver the same message: not to show up for work because they wouldn’t have access to the building. Now, that, too, sounds cold, but it’s a sound business decision to have people whose job was eliminated not work. Amazon is continuing to pay people, and they are encouraged to another job within the company, or they will receive severance pay.
Layoffs are messy in the best of situations. No one wants to see employees lose their jobs, particularly in an uneven labor market. But students might accept the process for what it is, while planning to include more transparency in their own bad-news messages.
Image source.