Amazon has announced plans to lay off 14,000 corporate employees this year, a significant move the company says is aimed at preparing for the widespread adoption of artificial intelligence (AI) technology. These cuts represent about 4% of Amazon’s corporate workforce, which numbers over 350,000 employees, according to a 2024 survey filed with the US Equal Employment Opportunity Commission.
The workforce reduction is part of a broader effort to make Amazon more efficient and adaptable to rapid technological changes. Beth Galetti, Amazon’s senior vice president of people experience, outlined the company’s rationale in a memo to employees that was later published on Amazon’s public blog. "We expect to continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains", Galetti said. She added that Amazon must operate more leanly to align with CEO Andy Jassy’s vision of the company functioning like "the world’s biggest startup."
AI at the Center of Strategic Changes
Jassy has been vocal about the transformative potential of AI, calling it "the most transformative technology we’ve seen since the Internet." According to Galetti, Amazon believes that being leaner and more agile is critical in a world where AI is reshaping industries at unprecedented speed.
"The world is changing quickly", Galetti emphasized. "We’re convicted 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."
Jassy has also been candid about the impact of AI on the workforce. In a previous blog post in June, he noted that advances in generative AI would likely lead to fewer people performing certain roles while creating the need for new jobs in other areas. "As we roll out more Generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs", Jassy stated.
He also hinted at the sweeping implications of AI for industries beyond Amazon. "AI will change how we all work and live", Jassy predicted, adding that billions of AI agents could eventually operate "across every company and in every imaginable field."
Layoff Details and Future Plans
The company plans to initiate the layoffs immediately, with affected employees being given 90 days to find new roles within Amazon. Those unable to secure a position will receive severance pay and additional benefits. The company has also said it will prioritize rehiring laid-off staff for roles in areas deemed strategically important.
While the current layoffs are substantial, there are indications that more cuts may follow. A Reuters report suggested the total number of layoffs could ultimately reach 30,000.
This is not the first time Amazon has executed mass layoffs. In 2023, the company eliminated 27,000 positions across various departments, citing a challenging global economic climate.
Efficiency and Market Pressures
Neil Saunders, managing director of GlobalData, contextualized Amazon’s decision as part of a broader trend within the corporate world to prioritize efficiency. "Markets across the world are tightening at the same time as underlying costs are rising", Saunders said. "Amazon is not immune to this, and it needs to act if it wants to continue with a good bottom line performance. In some ways, this is a tipping point away from human capital to technological infrastructure."
The cuts come at a time when concerns about AI-driven automation replacing human jobs are growing. While fears of widespread job losses persist, some AI experts have noted that these concerns are not always supported by substantial research.
Amazon’s strategy reflects the growing pressure on companies to adapt to technological advancements while navigating economic challenges. As the company continues to implement its AI-driven vision, the balance between workforce reductions and strategic investments will likely remain a critical focus.