The Washington Post recently published an interesting article entitled, “Amazon grew relentlessly. Now it’s getting lean.” The article’s subheading reads, “After two decades of expansion, the company known for doing it all is trying to find focus.” Do recent Amazon changes and layoffs really mean a smaller company with a loss of vision?
The Washington Post article does a nice job of outlining Amazon’s growth and recent moves towards leaner operations (if that’s what they truly are). The article highlights that, just five years ago, Amazon “was in rapid expansion and experimental mode, building its delivery network to get packages to people in two days or less, reshaping the internet with its cloud services business and reinventing grocery in part through its acquisition of Whole Foods.”
But the article goes on to point out that “cracks” in Amazon’s growth started to appear last summer. In particular, the “cracks” started when the company “announced that it had over hired and overextended its logistics operation during the coronavirus pandemic and would be reducing head count and slowing growth.”
Since that announcement, Amazon is now “closing offices, cutting business lines and laying off 27,000 corporate workers, including those in core areas like cloud computing and advertising.” According to the Post, all of these are signs that “the era of uninhibited growth at the company famous for doing it all is at an end.”
The Post also points out how Amazon is changing its strategies and tactics, and flirting with changes in its core values. These changes and diminished growth, as the article suggests, might mean a lack of company focus.
We think it’s important to first note that despite layoffs and closures, Amazon still remains as a huge company. Amazon doesn’t really appear to be shrinking per se, but we think it’s more that the company is scaling back to where it was at pre-Pandemic. Currently, Amazon is the second largest private employer in the U.S.
But we also have to realize that things with Amazon have changed. Here, we can look to a statement from current CEO Andy Jassy as evidence: “the overriding tenet of our annual planning this year was to be leaner.”
A question, though, is whether leaner means a movement away from the concept that the customer comes first. We do feel that the overall customer experience with Amazon might be waning in overall quality. This might just mean a lack in balance, however, and not a serious loss of focus.
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