Amazon has all but confirmed that AI is the reason it’s axing 14,000 corporate jobs.
Amazon today told employees that it was cutting 14,000 corporate roles within the company. Amazon said that AI was the most transformative technology since the internet in its note to employees, and said that its rise had convinced Amazon that they need to be organized more leanly. Amazon had 350,000 corporate employees before the current layoffs, which means that around 5% of its corporate employee base has been impacted.
“Some may ask why we’re reducing roles when the company is performing well,” the note said. “Across our businesses, we’re delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. What we need to remember is that the world is changing quickly. 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 convicted 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,” it added.
It had earlier been reported that Amazon was axing 30,000 roles. The number declared by Amazon is lower, but Amazon has explicitly called out AI as one of the reasons why the cuts have taken place.
Amazon had earlier laid off 27,000 employees in late 2022 and early 2023. “Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount,” Amazon CEO Andy Jassy had then told employees in a memo.
And in June this year, Amazon had given indications that there could be more job cuts on the horizon. CEO Andy Jassy had said that Amazon expected its corporate workforce to shrink over the next few years owing to gains from AI. “As we roll out more Generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs. It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company,” he had said.
These job cuts now seem to be here — it appears that Amazon has realized that AI can now take over enough work for the company to be able to eliminate 5% of its corporate workforce. Other companies too have either laid off employees or slowed down hiring citing gains from AI. Salesforce has said that it wouldn’t hire any software engineers this year because of improved efficiencies from AI, and Fiverr had laid off 30% of its workforce as it became an “AI-first company”. But this major layoff at Amazon will cause ripples in the overall tech space, and perhaps lead to many jittery employees across companies who could be worried about the future of their jobs.