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Amazon freezes corporate hiring amid worsening economic outlook

The decision comes as the e-commerce giant stuggles with soaring energy prices and cash-strapped customers

Amazon is freezing hiring of new corporate positions across the company for the rest of 2022 amid worsening economic conditions.

"We're facing an unusual macroeconomic environment, and want to balance our hiring and investments with being thoughtful about this economy," Beth Galetti, Amazon's SVP of people and technology, wrote in a blog post announcing the freeze Thursday.

"This is not the first time that we've faced uncertain and challenging economies in our past. While we have had several years where we've expanded our headcount broadly, there have also been several years where we've tightened our belt and were more streamlined in how many people we added."

Hiring freezes had reportedly hit several Amazon divisions, including the company's advertising business, over the past week, but now the company says it's expanded those measures to include the entire corporate workforce.

The decision to hold off on hiring until the new year shouldn't come as much of a surprise. While speaking at the Code Conference in Los Angeles in September, Amazon CEO Andy Jassy said AWS would be slowing its hiring rate. However, following a challenging third quarter in which executives warned of growing costs of and slowing demand, it appears hiring has not just slowed, but rather come to a dead stop.

On the company's Q3 earnings call last month, executives offered a dim outlook on the holiday quarter — historically one Amazon's strongest — forecasting revenues of gains of 2-8 percent year over year.

While AWS appeared to perform well during the quarter, growing 28 percent over the prior year, CFO Brian Olsavsky warned that the cloud giant wasn't immune to slowdowns either as the division contended with higher energy costs and crash-strapped customers.

"Although we had a 28 percent growth rate for the quarter for AWS, the back end of the quarter, we were more in the mid-20 percent growth rate," he said on last week's call "So we've carried that forecast through to the fourth quarter."

Olsavsky blamed macroeconomic uncertainties for a dip in cloud demand as customers refocus on controlling costs. He added that the company has also been plagued by surging energy prices which have increased more than 2x over the past few years.

Looking to the new year Galetti says Amazon intends resume hiring a "meaningful number of people," but added that Amazon will continue to monitor the economic situation and make further adjustments to their workforce as necessary. This will include backfilling positions to replace employees who leave the company as well as targeted hires for critical positions.

Amazon is hardly the only tech company grappling with deteriorating economic conditions. Faced with slowing growth, AWS rival Microsoft said it would work with customers to cut their cloud bills in the hopes of improving retainment rates.

Meanwhile, earlier this month, Meta blamed weak ad sales for falling revenues and 52 percent decline in net incomes. Meta CEO Mark Zuckerberg now faces calls from shareholders to cut as much as 20 percent of its workforce. ®

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