amazon to cut 14,000 corporate jobs

Amazon Announces Further Corporate Workforce Reduction

On Tuesday, Amazon announced plans to reduce its corporate employee base by 14,000 positions. This strategic move is intended to streamline operations, eliminate unnecessary hierarchical levels, and bolster investment in the company’s artificial intelligence initiatives.

Second Major Reduction in Recent Years

This represents the second-largest workforce reduction undertaken by the e-commerce giant, following a previous cut of 22,000 jobs in 2022. As of October 31, 2024, Amazon employed approximately 1.2 million individuals globally, with over 360,000 working within its corporate structure – encompassing administrative, sales, and executive functions.

Rationale Behind the Restructuring

Beth Galetti, Senior Vice President of People Experience and Technology at Amazon, communicated the decision to employees via a memo. She stated the aim is to strengthen the company by reallocating resources towards its most promising ventures.

Acknowledging potential questions given the company’s current performance, Galetti emphasized the necessity of these changes due to the rapidly evolving global landscape.

The Impact of Artificial Intelligence

“The current generation of AI represents the most significant technological advancement since the advent of the Internet,” Galetti explained. “It is empowering businesses to innovate at an unprecedented pace, both within established markets and in entirely new sectors.”

She further asserted that a leaner organizational structure, characterized by fewer management layers and increased individual accountability, is crucial for maintaining agility and responsiveness to customer needs and business demands.

Investment in Tech Infrastructure

These layoffs coincide with Amazon’s substantial investments in technological infrastructure, specifically to expand compute capacity for delivering AI services.

CEO Andy Jassy previously indicated in a staff memo that the increasing integration of Generative AI and AI agents would necessitate a shift in workforce composition. He predicted a reduction in the need for personnel in certain roles, alongside an increased demand for expertise in emerging areas.

Financial Performance and Expenditure

Amazon’s financial reports reveal a significant commitment to tech infrastructure. The company reported spending $55.6 billion during the first half of its financial year, primarily on infrastructure supporting the growth of its cloud services division, Amazon Web Services.

Second-quarter revenue increased by 13% to $167.7 billion compared to the previous year, with AWS contributing 18% to total net sales.

Previous Reports and Ongoing Adjustments

Reports surfaced on Monday indicating Amazon’s plans to eliminate up to 30,000 positions across various departments, including Human Resources, Devices & Services, and Operations.

Prior to this announcement, Amazon had already implemented smaller-scale job cuts within specific divisions, such as Communications and Sustainability in January.

Support for Affected Employees

Amazon is providing affected employees with a 90-day period to explore internal opportunities. Internal candidates will be prioritized for new roles.

Furthermore, severance packages, outplacement services, and continued health insurance benefits will be offered to those unable to secure alternative positions within the company.

Future Outlook

Galetti concluded by stating that Amazon will continue to streamline its organizational structure and pursue efficiency gains in 2026, while simultaneously focusing on strategic hiring in key areas.