If the years of the pandemic had resulted in a glut of jobs, things are quickly moving the other way now.
Amazon plans to cut as many as 30,000 jobs starting next week, Reuters reports. Amazon has 350,000 corporate employees, so these cuts could represent around 10% of its corporate workforce. Sources told Reuters that Amazon has initiated these cuts to works to bring down expenses and compensate for overhiring during the peak demand of the pandemic. If the layoff does occur, it will be the largest in Amazon’s history.
The cuts may impact a variety of divisions within Amazon, including human resources, known as People Experience and Technology, devices and services and operations, among others. Managers of impacted teams were asked to undergo training on Monday for how to communicate with staff following notifications that will start going out via email on Tuesday morning.
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 10% 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, if it does occur, 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.