Amazon has confirmed it plans to eliminate roughly 14,000 corporate jobs, a significant reduction that marks the company's largest layoff action in years. In a statement obtained by NBC News, Beth Galetti, Amazon's top human resources executive, articulated that this move is fueled by the company's investment in artificial intelligence (AI), which she deemed "the most transformative technology we've seen since the internet." The decision is part of a broader effort to restructure for agility and leaner operations, as Galetti further noted, "We’re convinced 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."
These layoffs starkly contrast with previous reports suggesting Amazon would possibly cut up to virtually 30,000 corporate jobs. According to an exclusive from Reuters, sources familiar with the matter had indicated a much higher number. The job reductions are said to affect multiple divisions, including People Experience and Technology, operations, devices and services, and Amazon Web Services. This would have amounted to nearly 10% of its corporate workforce, as Amazon bolsters efforts to manage expenses and reconcile with overhiring during the pandemic era.
The strategic sharpening comes as CEO Andy Jassy has previously outlined initiatives to curtail what he sees as excess bureaucracy within the organization. Extensive use of AI is likely to automate repetitive tasks and consequently streamline corporate teams. "This latest move signals that Amazon is likely realizing enough AI-driven productivity gains within corporate teams to support a substantial reduction in force," Sky Canaves, an eMarketer analyst, told Reuters. In June, Jassy had already forecast the impact of AI on workforce dynamics, indicating a downsizing trend.
It's a reflective period for the tech and retail industries; the move by Amazon is just one among a flurry of layoffs across the sector. Target is reducing 1,000 corporate jobs, whereas Meta Platforms and Microsoft also executed cuts. Bloomberg reported cuts at Paramount Skydance, while Salesforce trimmed its workforce earlier in the year. Financial institutions are joining the trend, with Goldman Sachs CEO David Solomon recently announcing job cuts due to gains in AI-driven efficiency. Amidst these adjustments, Amazon plans to assist affected workers in their job search, offering a 90-day period to find new internal roles, complemented by severance pay and continued health insurance, according to a message on the company’s website from Beth Galetti, Senior Vice President of People Experience and Technology at Amazon, which was reported by KOMO News.
Anticipation is building as Amazon gears up to announce its third-quarter earnings, which analysts expect to be substantial. According to KOMO News, Galetti hinted that the current layoffs may not be the conclusion of Amazon's restructuring, with plans to "continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains." Amazon's maneuvers suggest a nuanced balancing act between harnessing AI advancements and managing its extensive workforce in a rapidly evolving market.
