Amazon announced major “organizational changes” across its corporate workforce that will result in the elimination of 14,000 jobs, as the company accelerates investments in artificial intelligence and automation.
The restructuring at the corporate level comes less than a day after a Reuters report suggested Amazon was preparing to cut as many as 30,000 corporate roles. While the final number is lower, the 14,000-job reduction still marks one of the company’s largest layoffs in years, underscoring its push to reduce pandemic hiring and streamline operations with chatbots and other next-generation technologies.
The incoming layoffs were outlined in a letter signed by Beth Galetti, Amazon’s senior vice president of People Experience and Technology. She said:
While this will include reducing in some areas and hiring in others, it will mean an overall reduction in our corporate workforce of approximately 14,000 roles. We’re working hard to support everyone whose role is impacted, including offering most employees 90 days to look for a new role internally (the timing will vary some based on local laws), and our recruiting teams will prioritize internal candidates to help as many people as possible find new roles within Amazon. For our teammates who are unable to find a new role at Amazon or who choose not to look for one, we’ll offer them transition support including severance pay, outplacement services, health insurance benefits, and more.
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Some may ask why we’re reducing roles when the company is performing well. Across our businesses, we’re delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. 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 (in existing market segments and altogether new ones). 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.
At 14,000 corporate job cuts, that’s roughly 4% of Amazon’s corporate workforce of about 350,000 employees. Amazon’s total workforce is 1.55 million, including warehouse and delivery workers, making the corporate-level restructuring peanuts compared to the overall workforce.
We believe Amazon’s hiring spree during the pandemic era will be reversed at some point, given Galetti’s comments.
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Late in the U.S. cash session, Reuters dropped a startling headline: Amazon is preparing to take a Javier Milei-style axe to its corporate workforce, planning to slash upwards of 30,000 jobs as soon as tomorrow.
Reuters, citing three people familiar with the matter, said the 30,000 corporate job cuts set to begin tomorrow will amount to approximately 10% of Amazon’s corporate workforce of about 350,000 employees. However, the cuts represent a relatively small share of the company’s total workforce, which includes about 1.55 million warehouse and delivery workers.
The planned layoffs are aimed at reducing costs and reversing pandemic-era overhiring.
If confirmed, this would be Amazon’s largest round of layoffs since it cut about 27,000 jobs beginning in late 2022.
Shares of Amazon fell after the report, reversing some gains in the cash session.
Just wait until AI-related job losses begin to pick up for the e-commerce giant…