Amazon said Tuesday it plans to cut 14,000 corporate jobs, its largest round of layoffs in years, as it invests more in artificial intelligence.
In Amazon’s announcement, senior human resources executive Beth Galetti cited AI, which she said is “the most transformative technology we’ve seen since the Internet.” He added that AI was “enabling businesses to innovate much faster than ever before.”
“We are convinced that we must organize in a more agile way, with fewer layers and more ownership, to move forward as quickly as possible for our clients and businesses,” Galetti continued.
In June, Amazon CEO Andy Jassy sent company employees an email with the subject line “Some Thoughts on Generative AI.”
In it, Jassy noted that Amazon’s workforce would likely be reduced in the future.
“We will need fewer people doing some of the jobs done today, and more people doing other types of jobs,” he wrote.
Jassy continued: “It’s difficult to know exactly where this reflects over time, but in the coming years, we expect this to reduce our total corporate workforce as we realize efficiency gains through extensive use of AI across the company.”
The job cuts at Amazon come amid a wave of layoffs at other tech and retail companies. Target said last week it would cut 1,000 corporate office jobs and close 800 vacant positions. Meta Platforms, which owns Instagram and Facebook, also cut 600 jobs on Wednesday and Microsoft began cutting 9,000 jobs in July.
Paramount Skydance, which competes with Amazon in streaming and for sports rights, also plans to start cutting 1,000 workers this week. The total number of cuts could reach 2,000, Bloomberg reported. Salesforce reduced its workforce by 4,000 employees in September, citing “the benefits and efficiencies” of AI.
But AI isn’t just impacting hiring in the media and technology sectors.
Goldman Sachs Chief Executive David Solomon told employees in recent weeks that the Wall Street lender would “limit headcount growth through the end of the year” and cut a limited number of jobs due to efficiencies gained through the use of artificial intelligence tools.
Amazon had 1.55 million employees worldwide at the end of the second quarter, which ended June 30, according to a filing. About 350,000 of them work in corporate offices, Reuters reported.
The tech giant said it would give employees whose positions were eliminated on Tuesday “90 days to search for a new position internally,” and recruiters would prioritize internal candidates “to help as many people as possible find new positions within Amazon.”
In recent years, Amazon has also ordered corporate employees to return to the office and asked them to move closer to the physical offices where they are located.
Workers were told in June to move to Amazon hubs such as Seattle and the Virginia area, Bloomberg News reported. Two of Amazon’s regional headquarters are located in those places.
Amazon will announce its third-quarter results on Thursday. Wall Street analysts expect the company, which currently has a market value of more than $2.4 trillion, to post revenue of more than $170 billion.
Tuesday’s cuts may be just the beginning. Galetti said Amazon hopes to “continue to hire in key strategic areas while finding additional locations where we can remove layers, increase ownership and achieve efficiency gains.”
