Amazon is reportedly preparing to initiate a substantial reduction in its corporate workforce, targeting as many as 30,000 positions beginning Tuesday, 28 October. This impending layoff marks the most significant workforce contraction since 2022, as detailed in a Reuters report that cites sources privy to the situation.
Strategic downsizing follows pandemic-era staffing surge
This initiative is an integral facet of Amazon’s extensive cost-reduction strategy, aimed at streamlining its operations and recalibrating after a period of overexpansion during the Covid-19 pandemic, a time characterized by heightened online demand and aggressive scaling across various divisions.
While the forthcoming eliminations comprise just a fraction of Amazon’s global workforce of 1.55 million, they represent nearly 10% of its 350,000 corporate employees, underscoring the significant impact of these cuts.
Such cuts highlight a paradigm shift within the company from rapid expansion to a focus on sustainable profitability, as Amazon navigates a more conservative economic landscape marked by subdued consumer spending trends.
Largest layoffs since 2022 amid ongoing economic challenges
The last significant layoff event for Amazon occurred in late 2022, resulting in the elimination of approximately 27,000 positions across its business segments.
Earlier this month, Fortune disclosed that Amazon is poised to reduce as much as 15% of its human resources personnel, with further layoffs anticipated across various divisions.
The company’s human resources division, internally referred to as PXT or People eXperience Technology team, will experience significant impacts, alongside likely disruptions in other critical areas of its consumer operations.
Amazon refrains from commenting as training for management takes place
Despite receiving multiple media inquiries, Amazon has refrained from making public comments about the planned layoffs.
According to Reuters, the company has instructed managers of impacted teams to undergo communication training in preparation for notifications, which are expected to commence via email on Tuesday morning.
CEO Andy Jassy prioritizes efficiency and AI integration
CEO Andy Jassy has overseen significant layoffs since taking the helm, eliminating at least 27,000 corporate positions during the previous year, which constituted a significant portion of the company’s office workforce. This trend has paralleled similar cuts among major tech firms as the pandemic’s aftermath reshaped consumer demand patterns.
Presently, numerous employers are eager to leverage AI technology—initially for mundane tasks and eventually for more sophisticated roles—to minimize the necessity of maintaining an extensive human workforce.
AI evolution poised to redefine Amazon’s future workforce
Jassy himself is among those employers advocating for this transformation. Earlier this year, he urged employees to embrace the advancing AI landscape, heralding a shift in workplace dynamics.
“Those who adapt to this shift, become adept in AI, assist in our internal developments, and enhance customer service will be well-placed to make a significant impact and contribute to our reinvention,” he articulated in a companywide email, which has also been published on Amazon’s corporate blog.
Simultaneously, Jassy cautioned that not everyone would fit into this new paradigm: “We anticipate that these efficiency gains from widespread AI utilization will necessitate a reduction in our overall corporate workforce.”
Andy Jassy – a reputation for fiscal restraint?
Since assuming the role of CEO in 2021, Jassy has cultivated a reputation for fiscal discipline and operational reform. Amazon managers are routinely tasked with achieving targets related to ‘unregretted attrition’ (URA), a metric that reflects the percentage of personnel the company can afford to lose through voluntary departures, managed exits, or layoffs.
Nevertheless, sources have indicated to Fortune that the latest tranche of reductions is being perceived as part of a more extensive restructuring initiative, rather than merely a routine adjustment involving underperforming employees.
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