new York The reports of impending layoffs at Amazon are not unexpected, but they show: Andy Jassy is not the great strategist his predecessor Jeff Bezos undoubtedly was. Jassy made the AWS cloud division big. But he lacks the big vision for the entire group.
Amazon was the big beneficiary of the pandemic. But Jassy continued this success and invested far too much long after it was clear that the momentum would slacken. Since Jassy took over as CEO in early July last year, the company’s stock market value has shrunk by half to $1 trillion.
When Jassy took over the post, the mail order business was still booming because of the pandemic. That’s why Amazon has invested in new warehouses and transport fleets. Management assumed that people would become so used to the convenience of smiley face deliveries that they would never want to go back to physical stores.
Market share of cloud subsidiary AWS is shrinking
But things turned out differently: With the end of the lockdowns, people returned to the shops and Jassy was sitting in newly built logistics centers. The high costs for this have even pulled the US business, which is otherwise strong, into the red. Recently, the lucrative AWS cloud division hasn’t grown as much either – that is, the division that was otherwise always able to compensate for all losses in the classic mail order business.
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In view of the globally weaker economic development, more and more corporate customers are asking for discounts or going straight to the competition. AWS’ market share has recently shrunk compared to Google and Microsoft.
>> Read about this: Amazon, Meta, Microsoft – Big Tech goes on austerity course
And the other business areas? Almost everything Amazon has tried outside of online retail and AWS has been mediocre to poor. This applies to the device division such as the Alexa language assistant as well as to the health business, where Jassy recently again entered into a billion dollar bet with the doctor chain One Medical.
Andy Jasse has no profit buffer
One could argue that in its history under Bezos, Amazon has always tried a lot, especially in the early years, and put growth ahead of profit. What worked, you kept. What not, flew out. But in the end there is a lack of ideas that work.
Unlike Facebook or Google, Jassy has no profit buffer. In the first nine months of 2022, there has been a loss of three billion dollars so far. This is mainly due to the billions in write-downs on the stake in the electric car manufacturer Rivian – another expensive investment that did not bring the hoped-for results.
Amazon wants to lay off 10,000 employees
Jassy is now primarily focusing on reducing costs. Not only with fewer logistics centers, but also with layoffs. Given the business situation, that may be understandable. But a vision looks different.
More: Amazon expected to lay off 10,000 employees