Amazon mentioned on Tuesday that it plans to scale back its company workforce by 14,000 jobs because it seeks to scale back forms, take away layers and make investments extra in its AI technique.
This marks the e-commerce large’s second-largest job cuts because it slashed 22,000 jobs in 2022. Amazon had practically 1.2 million staff as of October 31, 2024, of which greater than 360,000 have been in its company division, in administrative, gross sales and govt roles.
In a memo shared with staff, Beth Galetti, senior vice chairman of individuals expertise and expertise at Amazon, wrote that the transfer is geared toward making the corporate “even stronger” by shifting sources to spend money on its “largest bets.”
Galetti acknowledged that the choice could be questioned in gentle of the corporate’s good efficiency, however argued that the layoffs are vital as a result of the “world is altering rapidly.”
“This technology of AI is probably the most transformative expertise we’ve seen because the Web, and it’s enabling firms to innovate a lot quicker than ever earlier than (in present market segments and altogether new ones). We’re convicted [sic] that we have to be organized extra leanly [sic], with fewer layers and extra possession, to maneuver as rapidly as doable for our clients and enterprise,” she wrote.
The layoffs come at a time when Amazon is investing closely in tech infrastructure to construct extra compute capability for providing AI companies.
In June, Amazon CEO Andy Jassy wrote in a memo to workers that the corporate would wish fewer staff because it continues to roll out extra AI brokers. “As we roll out extra Generative AI and brokers, it ought to change the best way our work is completed. We are going to want fewer folks doing a few of the jobs which might be being achieved as we speak, and extra folks doing different sorts of jobs. It’s onerous to know precisely the place this nets out over time, however within the subsequent few years, we count on that this can cut back our complete company workforce as we get effectivity beneficial properties from utilizing AI extensively throughout the corporate.”
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That focus is clearly seen when you think about the corporate’s expenditure on tech infrastructure. Amazon mentioned it had spent $55.6 billion within the first half of its present monetary 12 months totally on tech infrastructure to assist the expansion of its cloud companies enterprise, Amazon Internet Providers, in line with its quarterly report.
The corporate’s income elevated 13% to $167.7 billion within the second quarter in comparison with a 12 months earlier. AWS accounted for 18% of complete web gross sales.
Reuters reported on Monday that the corporate was planning to slash as much as 30,000 jobs throughout human sources, units and companies, operations, and different departments.
The corporate has made smaller job cuts throughout totally different divisions. In January, Amazon lowered a small variety of positions in its Communications and Sustainability departments.
Amazon mentioned it’s providing most affected staff 90 days to search for a brand new function internally, and its recruiters would prioritize inner candidates for brand spanking new roles inside the firm. It should additionally supply severance pay, outplacement companies, medical health insurance advantages, and extra to those that can’t transfer internally.
Galetti wrote that in 2026, the corporate would proceed to take away layers and “understand effectivity beneficial properties” whereas hiring in key areas.
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