Amazon is cutting about 14,000 corporate jobs, marking a 4% reduction of ifs corporate workforce, as it ramps up spending on artificial intelligence.
The company’s announcement comes afterreports began circulating Mondayabout massive job cuts.
WHO IS IMPACTED?
Teams and individuals impacted by the layoffs will be notified on Tuesday, the company confirmed. Most workers are being given 90 days to look for a new position internally, Beth Galetti, Senior Vice President of People Experience and Technology at Amazon, wrote in a memo to employees, according toReuters.
Those who are unable to find a new role at the company or who opt to not look for one internally will receive severance pay, outplacement services and health insurance benefits, the outlet reported.
Amazon’s total workforce is about 1.56 million, 350,000 of which are corporate employees.
IS AI IMPACTING AMAZON’S WORKFORCE?
The tech giant was looking to cut costs as it moves to ramp up spending on artificial intelligence.
CEO Andy Jassy, who has aggressively sought to cut costs since becoming CEO in 2021, said earlier this year that he anticipated generative AI would reduce Amazon’s corporate workforce in the next few years.
Jassy said at the time that Amazon had more than 1,000 generative AI services and applications in progress or built, but that figure was a “small fraction” of what it plans to build.
“As we roll out more Generative AI and agents, it should change the way our work is done,” Jassy said in a June 17 memo.
“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.”
WHY THE LAYOFFS?
After Amazon announced plans to invest $10 billion to build a campus in North Carolina to expand its cloud computing and AI infrastructure, Jassy encouraged employees to get on board with the company’s AI plans.
“If you believe your mission is to make customers’ lives easier and better every day, and you believe that every customer experience will be reinvented with AI, you’re going to invest very aggressively in AI, and that’s what we’re doing,” Jassy said in a conference call with industry analysts in May, noting that the potential for growth in the company’s Amazon Web Services business is massive.
“You can see that in the 1,000-plus AI applications we’re building across Amazon,” he continued. “You can see that with our next generation of Alexa, named Alexa+.”
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Amazon’s workforce doubled during the pandemic as millions stayed home, resulting in skyrocketing online spending.
However, the cuts may not be over as Amazon is still gauging what the size of its workforce needs to be — though the company did not say that more layoffs are on the way.
In 2023,the company cut 27,000 jobs— 9,000 in March of that year and another 18,000 two months later.
Amazon will post its quarterly financial results on Thursday.
The company reported in the last quarter 17.5% growth for its cloud computing arm Amazon Web Services.
