Tech giants Amazon and Google unleash hundreds of employee layoffs in various divisions. CRN breaks down each layoff announcement and the biggest takeaways.
Amazon and Google are laying off a few thousand employees, combined, across various business groups as the two IT giants confirmed several different employee cuts this week as 2024 kicks off.
From Google’s Assistant and hardware teams to Amazon’s Prime and Twitch divisions, hundreds of employees from each individual business group are being let go.
However, will these fresh rounds of employee layoffs affect each company’s most important IT assets: Amazon Web Services and Google Cloud? CRN takes a deep dive into Google and Amazon’s recent layoff announcements this week as well as looking back one year ago at January 2023, when Google and Amazon unveiled a total of 30,000 employee layoffs.
[Related: Google Cloud Hires Former Microsoft Vet As New AI VP]
Google And Amazon Layoffs In 2024 And 2023
In 2023, there were over 250,000 layoffs at tech companies, according to website layoff tracker Layoffs.fyi. Tech companies of all shapes and sizes conducted significant layoffs, with many companies saying they hired too many employees in 2021 and 2022 due to IT demand fueled by the COVID-19 global pandemic.
In January 2023, Google announced 12,000 layoffs while Amazon unveiled 18,000 cuts followed by another 9,000 layoff round in March 2023. At the start of 2024, both companies have announced they would be laying off several hundred employees in various divisions.
“To best position us for these opportunities, throughout the second half of 2023, a number of our teams made changes to become more efficient and work better, and to align their resources to their biggest product priorities,” a Google spokesperson said in a statement. “Some teams are continuing to make these kinds of organizational changes, which include some role eliminations globally.”
The Alphabet Workers Union says Google’s new round of layoffs in 2024 have affected more than 1,000 employees.
Amazon has taken a similar stance in its 2024 layoffs, saying the cuts are due to organizational changes with the goal of sustainable long-term growth.
“Our industry continues to evolve quickly and it’s important that we prioritize our investments for long-term success of our business,” said Michael Hopkins, senior vice president of Prime Video and amazon MGM Studios in a letter to employees.
Here are the five biggest takeaways from Google and Amazon’s recent employee cuts.
No. 1: Hundreds of Layoffs At Google Assistant As GenAI Takes Center Stage
Google confirmed it is cutting “a few hundred” employee roles in each division inside its Google Assistant software business.
A spokesperson for Google said the company is “restructuring” to help boost Google Assistant as it seeks to implement new generative AI technology into its portfolio.
In late 2023, Google said it would be using its generative AI chatbot Google Bard to build a new and improved Google Assistant version.
“It combines Bard’s generative and reasoning capabilities with Assistant’s personalized help,” said Sissie Hsiao, vice president and general manager of Google Assistant and Bard in a blog post in October. You can interact with it through text, voice or images — and it can even help take actions for you. … We’re building Assistant with Bard to be a more personalized helper that’s integrated with some of the Google services you already use, like Gmail and Docs — making it even easier to stay on top of the most important things in your life.”
The Takeaway: Google’s AI push, specifically around GenAI, is changing its internal workforce structure. It will be interesting to see how many Google business units will be impacted in 2024 as AI innovation automates more tasks.
Click through to read the other four layoff announcements and takeaways.
No. 2: Amazon Fires Over 500 Employees From Twitch
Amazon this week unveiled it will be laying off 35 percent of employees at its livestreaming video company Twitch, which is one of the world’s most popular livestreaming platforms.
Amazon confirmed more than 500 employees will be let go from Twitch.
“We have worked hard over the last year to run our business as sustainably as possible,” Twitch CEO Dan Clancy wrote in a blog post to staff this week. “Unfortunately, we still have work to do to rightsize our company and I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch. This will be a very hard day. Our service exists to empower communities to create, together, and every single one of you has played a vital role in fostering our community and furthering that mission.”
Amazon’s Twitch supports 1.8 billion hours of live video content per month and is highly popular in the video gaming industry.
Several top Twitch executives have left the company in recent months, including its chief content officer and chief product officers.
The Takeaway: The job cuts likely stem from Amazon’s quest to make Twitch profitable, which has so far eluded the company since Amazon purchased Twitch for $970 million in 2014. The company in December announced it would halt operations in South Korea in 2024 due to high costs.
No. 3: Google Layoffs Across Devices And Services Units
Google confirmed it is laying off hundreds of employees inside its Devices and Services business unit this week.
The layoffs will mostly impact Google’s augmented reality division, but will also hit Google’s Pixel, Nest and Fitbit hardware groups.
“A few hundred roles are being eliminated in DSPA [Devices and Services PA] with the majority of impacts on the 1P AR Hardware team,” said Google in a statement. “While we are making changes to our 1P AR hardware team, Google continues to be deeply committed to other AR initiatives, such as AR experiences in our products, and product partnerships.”
Google said the company is reorganizing the DSPA teams which were previously independent. Now, Google is switching to an organization model where there’s one division responsible for hardware engineering across Fitbit, Pixel and Nest.
Google acquired Nest in 2014 for $3.2 billion, followed by buying Fitbit for $2.1 billion in 2021. As part of layoff announcement this week, Fitbit co-founders Eric Friedman and James Park said they are leaving Google.
The Takeaway: The layoff move from Google suggests that the company is no longer working on its own AR hardware and is pivoting to commit to OEM partnerships.
No. 4: Amazon Cuts Hundreds Of Prime Video And MGM Studios Employees
Amazon confirmed this week it will be laying off hundreds of workers inside its Prime Video and MGM Studios teams.
Amazon leaders said the layoffs were made to prioritize its investments for long-term success.
“We’ve looked at nearly every aspect of our business with an eye towards improving our ability to deliver even more breakthrough movies, TV shows, and live sports in a personalized, easy to use entertainment experience for our global customers,” Michael Hopkins, senior vice president of Prime and MGM, wrote in the memo. “As a result, we’ve identified opportunities to reduce or discontinue investments in certain areas while increasing our investment and focus on content and product initiatives that deliver the most impact. As a result of these decisions, we will be eliminating several hundred roles across the Prime Video and Amazon MGM Studios organization.”
The layoffs come as Amazon has slated to turn on ads for Prime Video, which will likely add millions in revenue to the company. Users can also pay an extra $3 per month to avoid the ads.
The Takeaway: With the Prime and MGM Studios layoffs, along with millions in new advertisement revenue and streaming sales likely coming, Amazon is positioning itself to drive profitability in 2024 inside its entertainment businesses.
No. 5: AWS And Google Cloud Appear To Not Be Significantly Impacted
At the beginning of 2023, Google announced it would be eliminating 12,000 employees. Similarly, Amazon at the start of last year unveiled it would be cutting 18,000 employees.
Google’s 12,000-employee layoff round accounted for roughly 6 percent of its global workforce at the time. Additionally in 2023, Google also rolled out layoffs across different units including in recruiting, news and its Waze mapping service.
Google Cloud is not part of the Google Assistant business unit or related to Google’s hardware devices and services business, as both are tailored towards consumers. Google Cloud does not appear to be affected by either layoff announcement.
Although Amazon’s 18,000-employee layoff round in January 2023 didn’t affect AWS employees, another Amazon layoff round in March 2023 of 9,000 employees did see several hundred AWS workers let go. However, Amazon’s specific cuts in 2024 to its Twitch, MGM and Prime Video division is not effecting AWS.
If the start to 2024 is any indication, it appears both Amazon and Google’s fresh round of layoffs is far less impactful overall compared to 2023.
The Takeaway: From a cloud and channel standpoint, it’s unlikely that AWS and Google Cloud will feel any significant impact from the layoffs at Google and Amazon. Google appears to be reducing its internal augmented reality hopes and making some room for AI, while Amazon is looking to drive profitability. No 2024 layoffs appear to be tied to cloud computing, AI innovation or have impact on Google Cloud and AWS’ channel ecosystem.
