Mark Angelo, CEO, Yorkville Advisors

For months now, the international commercial market has wondered which city would “win” the next Amazon commercial complex. As the list grew smaller, the headlines grew more frequent. You could feel the electric anticipation. Last month, the list was narrowed down to 20 top contenders, and the world continued to wonder.

Through that time, Amazon basked in the warm glow of nearly-constant positive news and PR. Prime memberships grew, the company did more business, online holiday shopping was the best ever…

Now, though, Reuters is reporting Amazon plans to slash hundreds of jobs in its consumer business in Seattle. The company is shifting priorities, those sources say, and that means more need to promote and support Alexa, as well as other projects, and less time to build its thriving consumer market.

This news isn’t entirely surprising. Even though Amazon has been doing an incredible business, this is a company that has long been a trendsetter in working under loss leaders, keeping margins small and reinvesting profits in innovation. In short, Amazon is always building, always moving, and always shifting, and it’s always doing this on a relatively tight budget.  

That said, job cuts are a bit of an anomaly for the massive online retailer. The company has been in a fast-build mode for so long, the specter of cutbacks due to operational redundancies just hasn’t been much of an issue. Well, that’s changed, apparently.

Few details are available at this point. The news is still too new, and not really public, so there’s no confirmation about which lines of business, specifically, will see most of the cuts.

What will this news mean for the recent media darling? Likely, from a consumer PR standpoint, not too much. There will be some noise about it on social media, but consumers love what Amazon gives them: flexibility, freedom, massive selection, low prices, and comparatively good customer service … and they get all of this from their couch.

A further irony here is that much of the recent good news for Amazon has been the fact that the company is ramping up hiring. Many media reports say Amazon will be hiring upwards of 130,000 new jobs worldwide, and, of course, there will be about 50,000 new jobs at its second headquarters facility. It could be, simply, that this is a careful company balancing its workforce before launching a new endeavor or innovation.

A clue could be found in a recent statement from Amazon founder Jeff Bezos, praising better than expected results from Alexa: “Our 2017 projections for Alexa were very optimistic, and we far exceeded them… We don’t see positive surprises of this magnitude very often — expect us to double down.”

To manage that, they will need the right number of people in the right places. A reasonable explanation that should smooth over most complaints about the unexpected layoffs.

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