October 13, 2022
Andy Jassy has been on a cost-cutting spree since taking over as CEO of Amazon to save money as the company struggles with falling sales and a bleak global economy.
Jassy has no plans to quit anytime soon, as Amazon’s stock has fallen 33% this year, outpacing the S&P 500’s 25% drop, and is heading for its worst year since 2008. Moreover, recession concerns are growing, so the company cannot be blamed for being in the unusual position of having to cut costs.
His cost-cutting efforts include discontinuing its telehealth service, delisting its video-calling projector for children, closing most of its U.S. call centers, discontinuing its roving delivery robot, closing underperforming brick-and-mortar chains, halting or postponing construction of new warehouses, and downsizing his top-secret prototype lab, Grand.
Amazon has also stopped hiring corporate positions at its retail store and taken control of its annual hardware event, which typically includes a range of gadgets and robots, and plans to reverse its COVID-19 expansion, which gave it too much warehouse space and too many employees.
Ironically, despite claiming to be cutting costs, Amazon has acquired primary care provider One Medical for $3.9 billion, Roomba maker iRobot for $1.7 billion, and Belgian warehouse robotics company Cloostermans for an undisclosed amount. It also said it plans to spend about $1 billion over the next year on wage increases and expanded benefits for front-line workers, and that it will hire 150,000 employees to cope with the holiday rush.
The sources for this piece include an article in CNBC.
