Amazon to Cut 14,000 Corporate Jobs as AI Investment Grows

Amazon announced that it is planning for what could be the biggest layoff of its corporate workforce in several years – to the tune of 14,000 jobs – to accelerate its investment in artificial intelligence (AI), with executives saying the job cuts were made to better organize the company and direct the people and resources currently used to do non-AI work towards AI-based innovation.

In an announcement posted on Amazon’s official news room, the company’s chief human resource officer, Beth Galetti, described AI as “the most transformative technology since the Internet,” stating that companies using advanced levels of automation are able to innovate at rates that have never been seen before; therefore, if they want to continue innovating at these levels, companies need “fewer layers and more ownership” among their teams.

Amazon has already begun to transform itself from an internal hierarchical structure to a team-oriented structure in preparation for a future dominated by AI, and this is evident in the company’s decision to cut corporate personnel to focus on developing AI technology.

A Workforce Pivot Fueled by AI

Prior to this announcement, Amazon’s CEO Andy Jassy had signaled the coming layoffs in a memo titled “Some Thoughts on Generative AI“. This memo indicated that the efficiency created through use of AI would result in the elimination of some roles within the corporation while opening up new opportunities in technical areas.

“It is difficult to forecast how this will ultimately affect our corporate workforce,” Jassy stated, but “we anticipate that in the next few years, it will lead to a reduction in our total corporate workforce.”

These layoffs follow the company’s decision to begin reorganizing its offices and require some employees to move closer to its primary office locations — primarily the Seattle area and Northern Virginia — as was first reported by Bloomberg.

Layoffs Spread Across Tech and Beyond

As Amazon begins to cut corporate personnel due to the use of automation, other large corporations across various industries are also beginning to take similar steps, as evidenced by recent decisions made by tech giants, including Meta and Microsoft who both cut thousands of employees, and retail competitor Target which cut 1,800 employees as part of its recent overhaul, and financial institutions like Goldman Sachs, whose CEO David Solomon told his employees that the company would slow down adding employees and rely more heavily on AI to become more efficient.

According to Amazon’s corporate website, the approximately 350,000 corporate employees account for roughly 22% of its total workforce of 1.55 million employees. Those impacted by the layoffs will be given 90 days to attempt to find new roles within the organization, in an effort to retain as many of them as possible.

Amazon will report third-quarter earnings this week, and analysts project the company will earn more than $170 billion in revenue and have a market value of more than $2.4 trillion, indicating that a significant amount of corporate-wide change can occur, even when a company is performing financially well beyond expectations.

Galetti further noted that, based upon Amazon’s continued efforts to grow in strategically important areas while reducing excess organizational layers to enable the company to “move faster for customers”, there will likely be more changes to come.