Amazon Plans Major Job Cuts
Reports indicate that Amazon is set to begin cutting around 30,000 corporate jobs starting this Tuesday. This decision marks one of the most significant workforce reductions in the U.S. over the past two decades, as the company looks to overhaul its operations with a focus on artificial intelligence.
These layoffs, accounting for 9% of Amazon’s 350,000 global office staff, may unfold over several weeks. Although the company has not commented on these reports, sources familiar with the situation shared details with Reuters.
The Seattle-based giant has been on a downsizing spree since CEO Andy Jassy took the helm from Jeff Bezos in 2021. Over the past two years, Jassy has eliminated a total of 27,000 positions, primarily in divisions like Amazon Web Services, device operations, and entertainment sectors including Prime Video and Twitch.
This week’s cuts could affect various departments, including human resources and operations, as per sources reporting to Reuters.
Managers in the impacted areas were reportedly instructed to prepare for briefing sessions with employees as notifications will begin going out on Tuesday morning.
These layoffs coincide with Amazon’s push to enhance its automation and AI capabilities, which Jassy stated are critical for the company’s future growth. In an email to staff, he emphasized that those with skills in AI would be essential in reshaping the organization.
In fact, Amazon has acknowledged that increasing its reliance on AI could lead to greater operational efficiency and a reduced workforce.
Earlier this month, reports suggested that the company might cut up to 15% of its People Experience and Technology division, which comprises 10,000 employees focused on recruitment and HR technology.
The planned job cuts are part of a larger restructuring effort, as Amazon navigates a landscape where major layoffs have also been seen at companies like Meta and Alphabet, the parent company of Google. This shift in the tech industry is largely influenced by increasing investments in AI technology.
Amazon is investing over $100 billion this year to expand its cloud and AI systems while simultaneously tightening its budget.
Recently, internal documents indicated that the company intends to replace around 500,000 jobs with automation, aiming to automate 75% of its fulfillment operations by 2033. Executives believe that increased automation could significantly enhance sales without the need to hire large numbers of additional employees.
However, the company has clarified that such plans do not represent a formal hiring policy, asserting its commitment to generating new roles in logistics and tech.
Jassy’s cost-reducing tactics include a mandatory return to in-office work and rigorous performance evaluations, which some have dubbed “exhaustion without regrets.” This approach encourages managers to let go of underperformers.
The company’s workforce had expanded drastically during the pandemic, prompted by a surge in online shopping. Nonetheless, Jassy is now realigning resources toward more profitable ventures like AWS and advertising.
While Amazon’s stock has seen about a 20% increase over the past year, the outlook remains precarious amid heightened scrutiny from investors concerning long-term viability.
Despite these cuts, Amazon is also looking to hire 250,000 seasonal workers for warehouses in preparation for the holiday rush, signaling a mix of job opportunities amidst widespread layoffs.
Overall, Jassy has been actively seeking to streamline Amazon’s management processes, with a feedback channel introduced earlier this year yielding over 1,500 suggestions and resulting in more than 450 process changes.
