At a Glance
- Amazon announced a second wave of layoffs, slashing 16,000 corporate positions.
- The cuts follow an earlier round of 14,000 jobs in October and are part of a broader strategy to use generative AI.
- Employees will receive 90 days to seek internal transfers, with severance, outplacement, and health benefits offered to those who do not find new roles.
Why it matters: The move marks Amazon’s largest job reduction since 2023, when 27,000 positions were eliminated, and underscores a shift toward AI-driven efficiency.
Amazon announced on Wednesday that it would cut about 16,000 corporate jobs in a second round of mass layoffs that began three months ago. The tech giant said it plans to use generative artificial intelligence to replace corporate workers and has been trimming a workforce that swelled during the pandemic.
Layoffs and AI Strategy
Amazon’s senior vice president Beth Galetti explained the rationale in a blog post published Wednesday. She said the company has been “reducing layers, increasing ownership, and removing bureaucracy.”
The company did not disclose which business units would be affected or where the cuts would take place. The latest reductions follow a round of job cuts in October, when Amazon said it was laying off 14,000 workers. While some units completed those “organizational changes” in October, others did not finish until now, Galetti said.
CEO Andy Jassy, who has aggressively cut costs since succeeding founder Jeff Bezos in 2021, said in June that he anticipated generative AI would reduce Amazon’s corporate workforce in the next few years. The layoffs announced Wednesday are Amazon’s biggest since 2023, when the company cut 27,000 jobs.
Key Points
- Generative AI is a central driver of the workforce reduction.
- The cuts are part of a broader effort to streamline operations and eliminate bureaucracy.
- Amazon’s profits rose nearly 40% to about $21 billion in its most recent quarter, and revenue surpassed $180 billion.
Company Response and Support
Galetti outlined the support Amazon would provide to affected employees. U.S.-based staff will be given 90 days to look for a new role internally. Those who are unsuccessful or do not want a new job will be offered severance pay, outplacement services, and health insurance benefits.
“We’re making these changes, but we’ll also continue hiring and investing in strategic areas and functions that are critical to our future,” Galetti said.
The company’s approach mirrors a broader trend in the tech sector, where firms are cutting costs while maintaining investment in growth areas. In October, Jassy said the cuts were driven by “culture” rather than finances or AI:
“It’s culture,” he said. “And if you grow as fast as we did for several years, the size of businesses, the number of people, the number of locations, the types of businesses you’re in, you end up with a lot more people than what you had before, and you end up with a lot more layers.”
Context and Industry Impact
Amazon’s workforce had doubled during the pandemic as millions stayed home and boosted online spending. The company’s layoffs are part of a broader pattern of job cuts across Big Tech and retail as spending returns to pre-pandemic levels.
Labor data shows a reluctance by businesses to add workers even as economic growth has picked up. Companies hired aggressively after the pandemic and now feel they no longer need to fill more positions. Other factors-such as tariff policy uncertainty, elevated inflation, and the spread of AI-have also played a role.
Other companies are taking similar actions. On Tuesday, UPS announced it would cut up to 30,000 operational jobs through attrition and buyouts this year as it reduces the number of shipments from its largest customer, Amazon. That followed 34,000 job cuts in October at UPS and the closing of daily operations at 93 leased and owned buildings during the first nine months of last year.
Pinterest also said it plans to lay off under 15% of its workforce as part of a broader restructuring that pivots more money to artificial intelligence.
Key Takeaways
- Amazon is cutting 16,000 corporate jobs, a move driven by generative AI and a desire to streamline.
- Employees receive a 90-day internal transfer window and severance, outplacement, and health benefits.
- The layoffs are part of a broader trend of cost-cutting across the tech industry, even as profits rise.
- Other major firms, such as UPS and Pinterest, are also reducing staff in response to shifting market dynamics.
Shares of Amazon Inc., based in Seattle, rose slightly before the opening bell Wednesday, indicating investor uncertainty about the long-term impact of the layoffs.
