Amazon Cuts 16,000 Jobs in Latest Layoff Wave
Amazon is set to eliminate around 16,000 corporate positions, marking its second round of significant layoffs within just three months.
The technology giant has indicated plans to incorporate generative artificial intelligence as a means to replace some of its corporate workforce. Moreover, it has been streamlining staff numbers that expanded notably during the pandemic.
Beth Galetti, a senior vice president at Amazon, mentioned in a blog post that the company is “reducing layers, increasing ownership, and removing bureaucracy.” However, specifics on which business units would be affected remain unclear.
This new round of reductions follows an earlier announcement in October, when Amazon revealed it would lay off 14,000 employees. Although some organizational adjustments were completed back then, others have only just finalized, according to Galetti.
She noted that U.S. employees would have 90 days to seek new internal opportunities. Those who choose not to pursue another position or are unable to find one will receive severance, support services for job placement, and health insurance benefits.
“While we’re making these changes, we’ll also continue hiring and investing in strategic areas and functions that are critical to our future,” Galetti added. Chief Executive Andy Jassy, who has aggressively worked to cut costs since he took over from Jeff Bezos in 2021, indicated in June that he expected generative AI to diminish Amazon’s corporate workforce over the next few years.
The layoffs disclosed are the largest since 2023, when Amazon cut 27,000 jobs. At the same time, Amazon and several other major tech firms have been reducing their workforce dramatically as they adjust spending in the wake of the COVID-19 pandemic. The company’s workforce had doubled during the pandemic as online shopping surged.
Interestingly, the job cuts are coming while Amazon remains financially robust. In its most recent quarter, the company reported a nearly 40% increase in profits to around $21 billion, with revenue exceeding $180 billion.
Jassy previously clarified that the layoffs weren’t a direct result of financial struggles or the rise of AI. “It’s culture,” he stated in October, noting that rapid growth led to an unsustainable workforce size and layers of management.
Overall hiring in the U.S. appears stagnant, with just 50,000 jobs added in December—barely different from the previously revised figure of 56,000 for November. Labor statistics suggest that businesses are cautious about filling positions despite some economic recovery. Many companies that had ramped up hiring post-pandemic no longer see the need for further growth. Additionally, hesitance persists due to uncertainties arising from fluctuating policies, heightened inflation, and the potential impact of AI on various jobs.
Despite economists describing the current job landscape as a “no hire-no fire” environment, there are indications that some companies are still downsizing. For instance, UPS announced plans to cut up to 30,000 operational jobs this year via attrition and buyouts as it reduces shipments from Amazon, its largest client. This follows a previous round of 34,000 job reductions in October and closures of daily operations at numerous facilities last year.
Additionally, Pinterest recently revealed intentions to lay off nearly 15% of its team during a larger restructuring, focusing more resources on AI development.
In the midst of these announcements, Amazon’s stock experienced a slight uptick just before the market opened on Wednesday.
