Amazon said it would cut 14,000 corporate staffers this year in a mass layoff aimed at readying the company for wide adoption of AI technology.
The company noted that it would be hiring in key areas and would prioritize those who lost their jobs for those roles. But the company also said it wasn’t done with layoffs.
“We expect to continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains,” said Beth Galetti, Amazon’s senior vice president of people experience in a memo to employees that the company put on its public blog.
Reuters, which on Monday first reported Amazon would lay off staff, said the job cuts could ultimately reach 30,000.
Galetti said Amazon needs to operate more leanly to achieve CEO Andy Jassy’s vision of operating like the world’s biggest startup. Jassy wants the company to remain nimble so it can adapt and change quickly as AI upends the technology sector.
“What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before,” Galetti said. “We’re convicted that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.”
Amazon has over 350,000 corporate employees, according to a 2024 survey filed to the US Equal Employment Opportunity Commission, so the cuts represent about 4% of the company’s overall staff.
Layoffs will begin Tuesday. Most employees will be given 90 days to look for new roles internally, while people that can’t get new jobs at Amazon will be given severance pay and additional benefits.
In June, Jassy said in a separate blog post to employees that efficiency gains from artificial intelligence would allow the company to eventually have a reduced human workforce.
“As we roll out more Generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” he bluntly admitted in a previous note.
Al won’t just effect change at Amazon, Jassy said. AI “will change how we all work and live,” including “billions” of AI agents “across every company and in every imaginable field.” However, much of this remains speculative.
“Many of these agents have yet to be built, but make no mistake, they’re coming, and coming fast,” Jassy said.
It’s not the first round of massive layoffs for the tech giant. In 2023, the company cut 27,000 workers in its human resources department, Amazon Stores, Amazon Web Services and other divisions. At the time, Jassy attributed the job cuts to a worsening global economic outlook.
The company’s cuts are the latest in a long line of efforts to make Amazon more efficient and focused, said Neil Saunders, managing director of GlobalData, in a note to investors Monday.
“Markets across the world are tightening at the same time as underlying costs are rising,” Saunders said. “Amazon is not immune to this, and it needs to act if it wants to continue with a good bottom line performance. In some ways, this is a tipping point away from human capital to technological infrastructure.”
The cuts come as the US job market has showed warning signs for months, especially for young tech workers. There have been widespread concerns that generative AI could eventually replace many human workers as companies cut costs through greater automation. However, AI experts say a lot of these fears aren’t backed by substantial research.
Source: edition.cnn.com
