 "Did Amazon lay off 14,000 due to cost-cutting and AI? Here's what CEO said")
Amazon's Chief Executive Officer (CEO) Andy Jassy on Thursday (local time) clarified the reason for the recent 14,000 corporate jobs cuts that happened earlier this week, adding that the layoffs were not because of cost-cutting or chasing artificial intelligence, Business Insider reported.
Speaking at the company's quarterly earnings call, Jassy cited "culture" as the reason for these layoffs. He said, "The announcement that we made a few days ago was not really financially driven, and it's not even really AI-driven, not right now at least. It really — it's culture."
According to the report, Jassy's is reportedly trying to enhance the "performance standards, enforce discipline, and eliminate bureaucracy".
In a blog post on Tuesday, Amazon's Senior Vice-President of People Experience and Technology, Beth Galetti, said that despite the company's strong performance, it is eliminating jobs as a result of artificial intelligence rapidly changing the world. "This generation of AI is the most transformative technology we've seen since the Internet, and it's enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones)," she wrote.
Amazon's growth created layers: CEO
In the quarterly earnings call, Jassy said that the company's rapid growth created a "lot more layers" that slowed the decision-making at the company, and added that with the ongoing transformation in artificial intelligence, "there has been a more critical time for the company to operate leaner and move faster".
Elaborating further, he said, "Sometimes, without realizing it, you can weaken the ownership of the people that you have who are doing the actual work. And it can lead to slowing you down."
Jassy argued that too many layers of management have crept in, which stifled the initiative. He added that the layoffs are designed to restore the nimbleness and ownership that defined Amazon's early days.
The layoffs, he said, are designed to "restore the nimbleness" and “ownership” that defined Amazon’s scrappy early days. “We are committed to operating like the world’s largest startup,” he said.
According to Jassy, the last quarter's layoffs came with an estimated $1.8 billion in severance costs.
Layoffs at Amazon
A Reuters report on October 27 stated that the e-commerce giant is considering eliminating nearly 30,000 jobs as part of its major cost-cutting effort to streamline operations after overhiring during the Covid-19 pandemic.
Despite the figure representing a small percentage of Amazon’s 1.55 million total employees, it accounted for 10 per cent of the company's 350,000 corporate staff. It was expected that the fresh round of job cuts would be the largest since the company's 27,000 layoffs carried out between late 2022 and early 2023.
Amazon plans to hire 250,000 seasonal workers
Despite recent corporate layoffs, Amazon announced plans to recruit 250,000 seasonal employees to manage heightened demand during the upcoming holiday shopping period.