Key Points
- Amazon will cut 14,000 corporate jobs to streamline operations and focus on AI.
- Beth Galetti cites the need for a leaner structure to move quickly in a changing market.
- CEO Andy Jassy highlights generative AI and AI agents as drivers of workforce change.
- Affected employees receive 90 days for internal transfers, severance, and outplacement services.
- The cuts follow $55.6 billion spent on tech infrastructure and a 13 percent revenue rise.
- AWS accounts for 18 percent of total net sales, underscoring its strategic importance.
- Previous smaller cuts were made in Communications and Sustainability earlier in the year.
- Amazon’s total workforce remains near 1.2 million, with over 360,000 in corporate roles.
Amazon’s Workforce Reduction Strategy
Amazon announced that it will reduce its corporate workforce by 14,000 jobs. The decision, outlined in an internal memo, is framed as a step toward removing bureaucratic layers, increasing agility, and reallocating resources to the company’s “biggest bets,” particularly in artificial intelligence. Beth Galetti, senior vice president of people experience and technology, explained that the cuts are intended to make the company stronger by shifting focus to AI‑driven growth.
Rationale Behind the Cuts
Galetti noted that the rapid evolution of AI, described as the most transformative technology since the Internet, is reshaping how work gets done. She argued that a leaner organization with fewer layers and more ownership is essential for speed and customer focus. Andy Jassy, Amazon’s chief executive, echoed this sentiment, stating that the rollout of generative AI and AI agents will change job functions, leading to a net reduction in corporate staff over the coming years.
Impact on Employees
Amazon will provide affected staff with 90 days to explore internal mobility options, prioritize internal candidates for new roles, and offer severance, outplacement services, and continued health benefits. The company’s approach aims to mitigate the impact of the layoffs while positioning remaining employees for roles that align with the AI‑centric strategy.
Context of Investment and Performance
The workforce reduction occurs as Amazon continues to invest heavily in technology infrastructure. In the first half of its current fiscal year, the company spent $55.6 billion on tech infrastructure, primarily to support the growth of Amazon Web Services (AWS). During the same period, Amazon reported a 13 percent revenue increase to $167.7 billion, with AWS contributing 18 percent of total net sales.
Previous and Ongoing Adjustments
Earlier in the year, Amazon made smaller cuts in its Communications and Sustainability departments. The current plan represents the second‑largest job reduction since the 22,000 cuts announced in 2022. While the overall headcount remains close to 1.2 million employees, more than 360,000 of those are in corporate roles that will be directly affected by the announced cuts.
Future Outlook
Galetti indicated that the company will continue to remove layers and pursue efficiency gains through 2026, while also hiring in key growth areas. The emphasis on AI, both in product offerings and internal processes, suggests that Amazon expects the workforce restructuring to support sustained innovation and competitiveness in a rapidly evolving market.
Source: techcrunch.com