Key Takeaways
- Amazon is cutting 14,000 roles from its 350,000-person global corporate workforce, the company announced on Tuesday.
- The layoffs are part of an effort to reduce bureaucracy and reallocate resources to high-growth areas, particularly in AI.
- Amazon is the fifth most valuable company in the world, with a market capitalization of $2.4 trillion.
Amazon is laying off approximately 14,000 corporate workers, the company announced in a blog post on Tuesday. It marks one of the largest job cuts in the company’s corporate history.
According to the post, Amazon is offering several support measures and severance packages to corporate employees affected by the layoffs. Most employees will have 90 days to search for new roles within Amazon, during which their pay and benefits will continue. Those who do not secure another position internally during this notice period will receive transition support, including severance pay and health insurance benefits.
The layoffs are part of an ongoing effort to streamline bureaucracy and redirect resources toward high-growth areas, particularly AI initiatives. Amazon is making significant investments in AI infrastructure, with capital expenditures projected to exceed $120 billion for the year, up almost 50% from last year.
Amazon is the world’s second-largest private employer, with about 1.5 million people working for the company, mostly in warehouse roles. Out of its entire global workforce, roughly 350,000 are corporate employees; that means the recent plan to cut 14,000 corporate jobs affects about 4% of Amazon’s corporate staff.
Related: Amazon Just Unveiled AI Smart Glasses for Its Drivers — Here’s What They Actually Do
Amazon CEO Andy Jassy warned in June that AI would cause the company to reduce its workforce. In a memo to staff, Jassy wrote that Amazon “will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.”
He wrote that he expects Amazon to reduce its total corporate headcount over the next few years due to AI, and that employees should learn to use AI tools and accomplish more with fewer team members.
Amazon is carrying out the layoffs to make the company leaner and less bureaucratic, even though the e-commerce giant is on good financial footing. According to its second-quarter earnings report, released on July 31, Amazon achieved a net profit of $18.2 billion for the second quarter of the year, a 35% increase compared to the same period last year. This performance was accompanied by $167.7 billion in revenue, up 13% year-over-year, and an operating income of $19.2 billion, increasing 31% from Q2 2024.
Amazon’s Senior Vice President of People Experience and Technology, Beth Galetti, addressed why the company is reducing roles despite its solid performance. According to Galetti, AI enables Amazon to innovate more quickly. Amazon needs to “be organized more leanly” and reduce the number of layers in its organization in order to “move as quickly as possible,” she wrote.
“What we need to remember is that the world is changing quickly,” Galetti wrote in the blog post. “This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones). We’re convinced 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.”
Related: Amazon CEO Andy Jassy Says There’s One Trait That Contributes ‘an Embarrassing Amount’ to Being Successful
Amazon’s last major rounds of layoffs occurred between late 2022 and early 2023, when the company gradually laid off 27,000 employees, another large round of job cuts.
Other tech companies have also recently conducted layoffs. Meta cut 600 positions from its Superintelligence Labs AI team last week, while Microsoft laid off more than 15,000 employees in May and July.
Amazon will report its third-quarter earnings on Thursday after market close. The company is the fifth most valuable in the world, with a market capitalization of $2.4 trillion at the time of writing.
Related: Amazon Aims to Replace 600,000 Future Hires With Robots, According to Leaked Documents
Key Takeaways
- Amazon is cutting 14,000 roles from its 350,000-person global corporate workforce, the company announced on Tuesday.
- The layoffs are part of an effort to reduce bureaucracy and reallocate resources to high-growth areas, particularly in AI.
- Amazon is the fifth most valuable company in the world, with a market capitalization of $2.4 trillion.
Amazon is laying off approximately 14,000 corporate workers, the company announced in a blog post on Tuesday. It marks one of the largest job cuts in the company’s corporate history.
According to the post, Amazon is offering several support measures and severance packages to corporate employees affected by the layoffs. Most employees will have 90 days to search for new roles within Amazon, during which their pay and benefits will continue. Those who do not secure another position internally during this notice period will receive transition support, including severance pay and health insurance benefits.
The rest of this article is locked.
Join Entrepreneur+ today for access.
Read the full article here
