Amazon cuts 16,000 employees, which is the company's second round of large-scale job cuts in the last three months. The move comes as the company seeks to improve its position in the battle for supremacy in the field of artificial intelligence.
In a blog post on Wednesday, the company said it must reduce bureaucracy to increase decision-making.
“We are working to strengthen our organization by reducing costs, increasing ownership and eliminating bureaucracy,” said Beth Galletti, senior vice president of Human Resources at Amazon.
In late October, Amazon announced it was cutting 14,000 corporate employees, following a directive from CEO Andy Jassy’s vision to operate as the world’s largest startup. He wants the company to remain agile so it can adapt and change quickly as artificial intelligence upends the tech sector.
Amazon is the second-largest private employer in America, behind Walmart. According to a 2024 study filed with the U.S. Equal Employment Opportunity Commission, Amazon has more than 350,000 corporate employees. The culmination of the two recent rounds of layoffs represents about 9% of the company's total office staff.
Galetti said in his blog post that the waves of layoffs will not become a “new rhythm“ of work, though Jassy predicted that Amazon will continue to reduce its headcount due to artificial intelligence. Instead, Amazon is evaluating “ownership, speed, and capacity to innovate for customers and making adjustments as needed”. said Galetti.
Amazon is in fierce competition with Microsoft, Google, Meta, OpenAI and a host of other technology companies that are vying for the computing power and large language models they believe will power the economy of the future. It's an expensive endeavor, but Jassy said the cuts are more about efficiency than cost savings.
Most employees will have 90 days to look for new positions internally, while those not rehired by Amazon will receive severance pay and other benefits, the company said.
Reported The layoffs were reportedly announced to staff on Tuesday evening in an internal email. That note was apparently sent unintentionally because it referred to the blog post, which had not been published until Wednesday morning.
Amazon separately announced Tuesday that it would close its Amazon Fresh and Amazon Go grocery businesses as it doubles down on its Whole Foods-branded stores.
Despite concerns that artificial intelligence is taking over jobs in the “white collar“, the fear that this is happening everywhere is exaggerated, according to a Vanguard report.
In fact, jobs that are highly exposed to automation with artificial intelligence are growing faster than before the pandemic – even faster than all other professions, the investment firm recently said.
The findings don't necessarily mean it's a safe bet for workers worried that AI could disrupt their careers. Some companies have recently announced they are cutting some positions because AI could automate entry-level tasks or make current workers more efficient.
Yet there is no evidence that the technology is causing widespread harm, at least not yet.