Amazon announced Tuesday that it will lay off about 14,000 employees, the latest reduction in the company’s multiyear cost-containment efforts.
The company said in a blog post that the layoffs are being made to make the company leaner and less bureaucratic, while also investing in its “biggest bets” such as generative artificial intelligence.
“This generation of AI is the most transformative technology since the Internet, allowing companies to innovate much faster than ever before (in existing and entirely new market segments),” said Beth Galetti, Amazon’s senior vice president of people experience and technology. “We believe we need to organize more efficiently, with fewer layers and more ownership, to act as quickly as possible for our customers and our business.”
CNBC previously reported that the layoffs are expected to end up being the largest layoffs in Amazon’s history. The job cuts could affect up to 30,000 employees, Reuters reported, citing sources.
Employees in Amazon’s cloud, grocery, video games, human resources, sustainability and communications, advertising, and devices divisions were notified of the layoffs early Tuesday, but the job cuts are expected to affect nearly every area of the company.
Amazon is the second largest private employer in the United States, with more than 1.54 million employees worldwide as of the end of the second quarter. This figure is primarily made up of warehouse employees.
The company has about 350,000 corporate and technology employees, and the 14,000 layoffs represent about 4% of that demographic.
The company said it intends to continue furloughing employees next year, although it plans to continue hiring in “key strategic areas.”
Amazon’s layoffs come as companies in industries such as tech, banking, automotive and retail point to the rise of generative AI as a force that could or already is changing the size of their workforces.
Some companies say they are able to hire fewer employees and increase revenue as a result of increasing their reliance on AI, which they believe will make them more efficient and productive.
Amazon CEO Andy Jassy said in June that the company’s workforce would shrink even further as a result of the company’s introduction of generative AI, telling employees that “fewer people will be doing some of the jobs that are being done today, and more people will be doing other types of jobs.”
Meta Last week, the company laid off about 600 staff in its AI department in order to reduce layers and become more agile. microsoft The company cut more than 15,000 jobs this year after CEO Satya Nadella told staff they needed to “rethink our mission for a new era” of AI. google took steps earlier this year to reduce bureaucracy by cutting staff in a number of departments and eliminating 35% of managers overseeing small teams.
Jassy, who took over the reins of Amazon from Jeff Bezos in 2021, has been running a company-wide cost-cutting campaign in recent years. Amazon laid off 27,000 employees between 2022 and 2023, and has continued to cut jobs since then, albeit at a smaller scale.
After hiring heavily during the coronavirus pandemic, Amazon is slimming down its workforce to meet surging demand for e-commerce and cloud computing services.
The company has since committed to investing about $118 billion in AI development and cloud infrastructure this year, while eliminating some unprofitable businesses. Amazon is under increasing pressure to show that its cloud and AI businesses are keeping pace with competitors.
At the same time, Jassy is overhauling Amazon’s corporate culture and trying to run it like “the world’s largest startup” to stay competitive. Last September, as part of a mandate requiring corporate employees to work in the office five days a week, he set a goal to flatten Amazon’s entire organization by the first quarter of this year.
Amazon announced earlier this month that it plans to hire 250,000 full-time, part-time and temporary workers in its transportation sector to meet holiday demand.
Amazon is scheduled to release third-quarter results after the market closes on Thursday.
