Amazon to Initiate Extensive Layoffs Amid Cost-Cutting Measures
SAN FRANCISCO (Reuters) – Amazon is poised to eliminate as many as 30,000 corporate positions starting Tuesday, a strategic move aimed at curbing expenses and addressing overstaffing that occurred during the pandemic’s heightened demand, according to insiders.
This reduction, although modest in the context of Amazon’s 1.55 million global workforce, amounts to nearly 10% of its approximately 350,000 corporate employees. If realized, this would constitute Amazon’s most significant workforce reduction since late 2022, when around 27,000 positions were removed.
An Amazon representative declined to provide commentary on the impending layoffs.
Over the past two years, Amazon has already executed smaller layoffs across various divisions, encompassing devices, communications, and podcasting.
The impending cuts are likely to affect diverse departments, including Human Resources—termed People Experience and Technology (PXT)—operations, devices, and services, as well as Amazon Web Services, according to those familiar with the matter.
Managers of affected teams participated in training on Monday to prepare for staff communications following email notifications set to commence Tuesday morning.
Amazon’s CEO, Andy Jassy, is spearheading initiatives to streamline operations by dismantling layers of bureaucracy, including a reduction in managerial roles.
Earlier this year, he established an anonymous complaint hotline to identify inefficiencies, which has garnered approximately 1,500 responses and prompted over 450 process alterations.
In June, Jassy remarked that increased adoption of artificial intelligence tools could precipitate further job cuts, particularly by automating repetitive tasks.
“This move suggests that Amazon is recognizing enough AI-driven productivity improvements within its corporate sectors to justify substantial workforce reductions,” stated Sky Canaves, an analyst from eMarketer.
“Moreover, Amazon faces short-term pressures to mitigate long-term investments aimed at enhancing its AI framework.”
The full extent of the employment cuts remains undetermined, with sources indicating potential fluctuations as Amazon’s financial strategy evolves. Earlier reports suggested that the Human Resources division might be poised for a cut of roughly 15%.
A program initiated earlier this year, requiring employees to return to the office five days a week—a policy among the most stringent in the tech sector—has not prompted the anticipated attrition, according to two insiders.
Employees who fail to check in daily, due to distances to corporate offices or other factors, are reportedly being informed they have voluntarily resigned from Amazon, and will not receive severance packages, thereby providing additional savings for the company.
According to Layoffs. fyi, a website monitoring job reductions in the tech industry, approximately 98,000 jobs have been lost this year across 216 companies. For the entirety of 2024, losses are projected to reach 153,000.
Amazon’s predominant profit segment, its cloud computing division AWS, reported second-quarter revenues of $30.9 billion—a 17.5% increase that significantly lags behind Microsoft’s Azure, which boasted gains of 39%, and Alphabet’s Google Cloud, which achieved a 32% increase.
Projections suggest that AWS’s third-quarter revenues will reach approximately $32 billion, reflecting an 18% growth, a slight deceleration from last year’s 19% uptick. Moreover, AWS continues to recover from a substantial 15-hour internet outage last week, which disrupted many popular online services, including Snapchat and Venmo.
Maintaining an optimistic outlook, Amazon anticipates another robust holiday shopping season and plans to hire 250,000 seasonal employees to support warehouse operations, mirroring its staffing strategy from the last two years.
Additionally, on Friday, Amazon announced a reorganization within a segment of its PXT unit dedicated to diversity initiatives, as outlined in a memo obtained by Reuters. The changes primarily involve internal promotions.
On Monday, Amazon shares witnessed a 1.2% increase, reaching $226.97. The company is scheduled to unveil its third-quarter earnings on Thursday.
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