Citing AI, Amazon Cuts 14,000 Corporate Jobs, With A Like Number To Go Soon

As it has done for two decades now, tech continues to eat its own, with AI now being the proximate cause.

Amazon today announced it is cutting 14,000 corporate jobs this week, with a like number expected to go after the busy holiday season. These cuts come even as the company had $18 billion in profit for its most recent quarter. Such employment reductions have been hypothesized since AI became the latest tech phenomenon, but Amazon's action follows similar layoffs by Microsoft and other competitors. Meta even announced that it was firing 600 AI staffers, presumably people whose skills seemed cutting edge last year but no longer live up to those of its even more recent hires. This Hunger Games style culling in tech is not expected to abate. JL

Karen Weise reports in the New York Times:

Amazon said today that it planned to cut 14,000 corporate jobs, as it spends aggressively on AI. Another round of cuts is expected in January, after the holiday shopping season, for 30,000 in total. The company had $18 billion in profit in the latest quarter. “Some may ask why we’re reducing roles when the company is performing well. The world is changing quickly,' and A.I. represents “the most transformative technology since the internet,” convincing Amazon to organize the company “more leanly.” Amazon’s competitors have been turning to layoffs as well. Microsoft cut 15,000 roles in the early summer. Target said last week it would trim 1,800 corporate jobs, and Meta laid off 600 people.

Amazon said on Tuesday that it planned to cut 14,000 corporate jobs, as it spends aggressively on artificial intelligence development.

Beth Galetti, Amazon’s executive in charge of human resources, said in a memo to staff that the layoffs would allow the company “to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”

Another round of corporate cuts is expected in January, after the holiday shopping season, for a total of approximately 30,000 in total, according to two people familiar with the cuts, speaking before the reductions were announced.

The company had $18 billion in profit in the latest quarter, and has increased spending on data centers that develop leading artificial intelligence systems. Capital expenses, which include data centers, are expected to top $120 billion this year, up almost 50 percent from last year. “Some may ask why we’re reducing roles when the company is performing well,” Ms. Galetti wrote on Tuesday. “The world is changing quickly,” she added, and A.I. represented “the most transformative technology we’ve seen since the internet,” convincing Amazon executives to organize the company “more leanly, with fewer layers.”

In June, Andy Jassy, Amazon’s chief executive, told employees that efficiency gains from using A.I. would shrink the company’s corporate work force over the next few years. “We will need fewer people doing some of the jobs that are being done today,” he wrote. While that may create new opportunities, he predicted that the overall corporate work force would be smaller as a result.  

 

Amazon has also looked to rein in the growth of its warehouse and other blue-collar workers, who make up most of its more than 1.5 million employees. The New York Times reported last week that the company had plans to use automation to avoid hiring more than 600,000 warehouse employees in a decade even as it expected to sell twice as many items over that period.

 

Amazon last saw widespread layoffs almost three years ago, in a series of cuts over several months that trimmed 27,000 positions. The company’s work force had ballooned during the early Covid-19 pandemic, topping 1.6 million. Though the business has since grown substantially, it had 1.5 million workers at the end of June. 

Amazon’s competitors have been turning to layoffs as well. Microsoft cut about 15,000 roles in the early summer. Target said last week that it would trim roughly 1,800 corporate jobs, and Meta laid off 600 people.