Amazon Announces 16,000 Corporate Job Cuts Amid AI Shift and Cost Reduction
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Amazon is eliminating approximately 16,000 corporate positions, marking its second significant round of layoffs in three months. The e-commerce giant cited plans to use generative artificial intelligence (AI) to replace corporate workers. The company has also been reducing a workforce that swelled during the pandemic.
Beth Galetti, a senior vice president at Amazon, stated in a blog post Wednesday that the company has been reducing organisational layers, increasing ownership, and removing bureaucracy. The company did not specify which business units or locations would be affected by the job cuts.
These recent reductions follow an earlier round of job cuts in October, when Amazon announced the layoff of 14,000 workers. Senior Vice President Galetti noted that some Amazon units completed those organisational changes in October, while others did not finish until now.
Galetti confirmed that United States-based staff would receive 90 days to seek new internal roles. Unsuccessful employees or those not desiring new positions will be offered severance pay, outplacement services, and health insurance benefits.
"While we are making these changes, we will also continue hiring and investing in strategic areas and functions that are critical to our future," Galetti stated.
Chief Executive Officer Andy Jassy, who has aggressively reduced costs since succeeding founder Jeff Bezos in 2021, said in June that he anticipated generative AI would decrease Amazon’s corporate workforce over the next few years. The layoffs announced Wednesday are Amazon’s largest since 2023, when the company eliminated 27,000 jobs.
Amazon and other major technology and retail companies have reduced thousands of jobs to align spending post-COVID-19 pandemic. Amazon’s workforce had doubled as many stayed home, boosting online spending during that period.
California’s workforce agency stated Wednesday it has not yet received a warning notice from Amazon, which is mandatory for large-scale layoffs in the state. Employment agencies in Washington, Amazon’s headquarters, and Virginia, with a major office, also did not immediately report any warnings.
Economic studies predict that higher-paying jobs in computer work and engineering are among the most susceptible to transformation by generative AI systems, which can assist with code writing. However, research last week by the Brookings Institution indicated that technology workers often possess the education, skills, and savings to transition more easily.
The same study also revealed millions of United States workers are heavily exposed to AI yet less equipped to adapt. Many are in administrative and clerical roles; approximately 86% are women, who tend to be older and concentrated in smaller cities, such as university towns or state capitals, with fewer career shift options.
Hiring has stagnated in the U.S. and in December. The country added a meager 50,000 jobs, nearly unchanged from a downwardly revised figure of 56,000 in November. Labour data indicates business reluctance to add workers, even as economic growth has picked up. Many companies hired aggressively post-pandemic and now have sufficient staff. Others have held back due to widespread uncertainty from President Donald Trump’s shifting tariff policies, elevated inflation, and the spread of artificial intelligence, which could alter or even replace some positions.
While economists describe the US labour situation as a “no hire-no fire” environment, some companies have announced job cuts, including recently. On Tuesday, UPS announced plans to cut up to 30,000 operational jobs this year through attrition and buyouts as the package delivery company reduces the number of shipments from what was its largest customer, Amazon. null This follows 34,000 job cuts in October at UPS and the closing of daily operations at 93 leased and owned buildings during the first nine months of last year.
Also on Tuesday, Pinterest plans to lay off under 15% of its workforce as part of a broader restructuring. The image-sharing platform is concurrently investing more in artificial intelligence.
These Amazon job cuts do not indicate the company is on shaky financial ground. In its most recent quarter, Amazon’s profit increased nearly 40% to about USD 21 billion, and revenue surged to more than USD 180 billion.
Late last year after layoffs, Chief Executive Officer Jassy stated that job cuts were not driven by company finances or AI. "It is culture," he said previously. "And if you grow as fast as we did for several years, the size of businesses, the number of people, the number of locations, the types of businesses you are in, you end up with a lot more people than what you had before, and you end up with a lot more layers.”
Shares of Amazon Inc., headquartered in Seattle, fell USD 2.47, or a little more than 1%, in late afternoon trading.
Amazon is cutting approximately 16,000 corporate jobs in its second major layoff round in three months.
The company attributes the reductions to generative artificial intelligence (AI) integration and efforts to streamline its post-pandemic workforce.
Affected United States-based staff will receive 90 days to find internal roles, with severance, outplacement, and health benefits offered to others.
Source: AP NEWS
