Amazon aims to reduce its workforce by as many as 30,000 corporate jobs
Amazon announced its intention to cut up to 30,000 jobs in the corporate sector, effective Tuesday, October 28. This decision comes as the tech firm aims to reduce costs and address overhiring that occurred during the pandemic’s peak demand, according to sources close to the situation.
While this figure represents a small fraction of Amazon’s workforce, it accounts for nearly 10% of its corporate staff, which totals around 350,000 employees.
Regarding the situation, sources have warned that if the job cuts occur, it will mark the tech giant’s largest layoff since late 2022, when it also initiated a job cut affecting approximately 27,000 jobs.
This move has sparked heated debates in the tech ecosystem. When reporters reached out to an Amazon representative for comment on the topic, the representative declined to respond.
Amazon decides on yet another layoff this year, sparking debates
Industry analysts have conducted research and discovered that Amazon has been reducing jobs in various departments, including devices, podcasting, and communications, over the last two years.
Following the recent job cuts, sources with knowledge of the situation noted that this move may impact several sectors, including human resources, known as People Experience, as well as technology, devices, services, and operations. They also hinted that the layoff will impact Amazon Web Services.
To initiate the layoff, managers from the impacted teams received training on Monday, October 27, on how to communicate with employees once the email notifications began being sent out on Tuesday morning.
While maintaining anonymity due to the confidential nature of the situation, sources close to the matter mentioned that Amazon’s CEO, Andy Jassy, is establishing a plan to reduce what he views as excessive bureaucracy by decreasing the number of managers.
They also shared that the CEO has set up an anonymous complaint line to identify inefficiencies, which has acquired about 1,500 responses and resulted in changes to processes surpassing 450 this year. This was after Jassy stated that adopting more AI tools in an operation might lead to additional job cuts, particularly by automating tasks that are performed repeatedly.
Amazon’s decision has prompted analysts to weigh in on the topic. An example is Sky Canaves, a principal analyst on the retail and e-commerce desk at EMARKETER.
Canaves claimed that the tech giant’s latest decision suggests the firm is probably experiencing sufficient productivity improvements from AI within corporate teams to justify reducing the number of workers. Canaves also reported that Amazon faces short-term pressure to balance its long-term investments in developing AI infrastructure.
Notably, details on the total number of layoffs for this round were not immediately clear. Sources familiar with the matter noted that the numbers may change as the tech company adjusts its financial goals. Fortune previously reported that the human resources department might encounter a reduction of around 15%.
Tech companies significantly reduce their workforce in the AI boom era
A program initiated earlier this year to bring workers back to the office five days a week, one of the strictest in the tech industry, has not resulted in enough departures, according to two sources familiar with the matter. They cited this as another factor that has led to many layoffs.
Regarding Amazon’s recent layoffs, the sources mentioned that workers who do not show up every day because they live far from the company’s corporate offices or for any other reason are apparently being told that they have voluntarily resigned from Amazon and must leave on their own without severance pay, which can save the firm money.
This action reflects a growing trend among tech companies, which are embracing significant layoffs across their various departments. To support this claim, data from Layoffs.fyi, a website that tracks job cuts in the tech industry, revealed that approximately 98,000 jobs have been lost so far this year across 216 firms. This number accounts for approximately 153,000 job losses reported for the entire year of 2024.
In the meantime, reports indicate that Amazon’s cloud computing division is its primary source of profit, with reported sales of $30.9 billion for the second quarter. This illustrates the company’s increasing adoption of AI in its operations as the technology becomes more widely adopted in the industry.
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