Amazon said Tuesday that it plans to cut 14,000 corporate jobs, its biggest round of layoffs in years, as it invests more in artificial intelligence.
In Amazon’s announcement, top human resources executive Beth Galetti cited AI, which she said the “most transformative technology we’ve seen since the internet.” She added that AI was “enabling companies to innovate much faster than ever before.”
“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,” Galetti continued.
In June, Amazon CEO Andy Jassy sent employees at the company an email with the subject line “Some thoughts on Generative AI.”
In it, Jassy signaled that Amazon’s workforce would likely shrink in the future.
“We will need fewer people doing some of the jobs that are being done today, and more people doing and more people doing other types of jobs,” he wrote.
Jassy continued, “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.”
The job cuts at Amazon come amid a wave of layoffs at other tech and retail firms. Target said last week it would cut 1,000 corporate office jobs and close 800 open roles. Meta Platforms, owner of Instagram and Facebook, also cut 600 jobs on Wednesday and Microsoft began eliminating 9,000 jobs in July.
Paramount Skydance, which competes with Amazon in streaming and for sports rights, also plans to begin cutting 1,000 workers this week. The total number of cuts could reach up to 2,000, Bloomberg reported. Salesforce reduced its workforce by 4,000 employees in September, citing “the benefits and efficiencies” of AI.
But AI is not just impacting hiring in the media and technology sectors.
Goldman Sachs CEO David Solomon told employees in recent weeks that the Wall Street lender would “constrain headcount growth through the end of the year” and cut a limited amount of jobs due to efficiencies gained through the use of AI tools.
Amazon had 1.55 million employees worldwide at the end of the second quarter, which ended on June 30, according to a filing. About 350,000 of those work in corporate offices, Reuters reported.
The tech giant said it would give employees whose roles are eliminated Tuesday “90 days to look for a new role internally,” with recruiters prioritizing internal candidates “to help as many people as possible find new roles within Amazon.”
Amazon has in recent years also ordered corporate employees back into the office and asked them to move closer to the physical office locations where they are based.
Workers were told in June to relocate to Amazon hubs such as Seattle and the Virginia area, Bloomberg News reported. Those locations are where two of Amazon’s regional headquarters are located.
Amazon is set to announce its third quarter earnings on Thursday. Wall Street analysts expect the company, which currently has a market value of more than $2.4 trillion, to report revenue of more than $170 billion.
Tuesday’s cuts may only be the beginning. Galetti said Amazon expects “to continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains.”
