Amazon plans to cut 16,000 jobs globally amid AI-driven restructuring

Amazon said US-based employees affected by the job cuts would be given 90 days to seek alternative internal roles, along with severance pay and transition support

Amazon on Wednesday said it would cut around 16,000 corporate jobs as part of an effort to reduce management layers and redirect resources amid growing competition in artificial intelligence, a senior company executive said in a blog post.

 

The company said US-based employees affected by the decision would be given 90 days to seek alternative roles internally, along with severance and transition support. The details were shared by Beth Galetti, senior vice-president for people experience and technology, in the blog post.

 

“We have been working to strengthen our organisation by reducing layers, increasing ownership and removing bureaucracy,” Galetti wrote in her explanation for the wide-ranging layoffs.

 

 

The latest announcement followed a previous round of job reductions disclosed a few months earlier, when Amazon said it planned to cut about 14,000 roles. Taken together, the reductions mirrored the scale of layoffs carried out in late 2022 and early 2023, when the company eliminated about 27,000 positions.

Why Amazon is restructuring its management and workforce

Chief executive Andy Jassy has in the past said on several occasions that the company needed to simplify its management structure after expanding rapidly during the pandemic. He also warned employees last year that wider deployment of artificial intelligence (AI) would reduce the size of the corporate workforce over time as more tasks became automated.

 

As of September 30, Amazon employed about 1.57 million people globally, most of them in warehouse and logistics roles, Bloomberg said in a report. The corporate workforce accounted for about 350,000 employees, meaning the planned cuts represented roughly 4.6 per cent of that group, it said.

 

Amazon is scheduled to report its financial results for the October–December quarter next week. Analysts expect revenue to exceed $211 billion, with profit estimated at more than $21 billion, The New York Times reported on Wednesday.

 

In the previous quarter, from July to September, the company reported sales of $180 billion and profit of more than $21 billion.

How AI spending is reshaping Amazon’s priorities

Amazon has cut costs across multiple divisions as it increased spending on data centres and infrastructure to compete in AI. The company was on track to spend about $125 billion last year on capital expenditure, including data centres.

 

As part of its effort to prioritise investments, Amazon also said this week it would shut its remaining cashierless Amazon Go convenience stores and Amazon Fresh grocery outlets. According to its website, the company operated 14 Amazon Go stores and about 50 Amazon Fresh locations, with some expected to be converted into Whole Foods Market stores. Amazon said it planned to add 100 new Whole Foods locations over the next few years and focus on faster online grocery delivery.