By Senad Karaahmetovic
Shares of Amazon (NASDAQ:AMZN) are up about 2% in pre-market Thursday after the e-commerce giant reported that it plans to cut more than 18,000 jobs.
The Wall Street Journal was the first to report on bigger-than-planned job cuts before Amazon confirmed the rumor. CNBC reported earlier that Amazon planned to cut about 10,000 of its workforce, hence the positive market reaction to bigger-than-expected cost cutting.
“We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted,” CEO Andy Jassy wrote in a memo to employees.
“However, because one of our teammates leaked this information externally, we decided it was better to share this news earlier so you can hear the details directly from me.”
Amazon admitted earlier that it had added workers too quickly. At the end of Q3, Amazon had over 1.5 million staff.
“Amazon has weathered uncertain and difficult economies in the past, and we will continue to do so,” Jassy wrote. “These changes will help us pursue our long-term opportunities with a stronger cost structure; however, I’m also optimistic that we’ll be inventive, resourceful, and scrappy in this time when we’re not hiring expansively and eliminating some roles.”
Vital Knowledge analysts praised Amazon for aggressively cutting costs.
“The job cut announcements within tech are hitting the tape with increased frequency,” the analysts wrote.
Yesterday, Salesforce (NYSE:CRM) said it will cut about 10% of its workforce.