Amazon is set to initiate significant job cuts, potentially impacting as many as 30,000 corporate positions, beginning this Tuesday. This decision is part of a broader strategy to reduce expenses and address overhiring that occurred during the heightened demand of the pandemic, according to sources familiar with the matter.
Although these layoffs represent only a fraction of Amazon’s total employee count of 1.55 million, they constitute nearly 10% of its corporate workforce, which is approximately 350,000 employees. If realized, this would mark the largest round of layoffs since the company eliminated around 27,000 jobs starting in late 2022.
The impending cuts are expected to affect various divisions within the company, including human resources, known as People Experience and Technology, devices and services, and operations. Managers from affected teams participated in training on Monday to prepare for notifying staff about the layoffs, with emails set to be dispatched on Tuesday morning.
CEO Andy Jassy is actively pursuing an initiative aimed at diminishing what he describes as excessive bureaucracy within Amazon, including a reduction in managerial roles. Earlier this year, he established an anonymous complaint line intended to identify inefficiencies, which has drawn over 1,500 responses and prompted more than 450 process changes. In June, Jassy indicated that increased use of artificial intelligence (AI) tools would likely contribute to additional job reductions, particularly by automating repetitive tasks.
Analysts suggest that this round of layoffs reflects Amazon’s recognition of adequate productivity gains attributable to AI within its corporate teams. Sky Canaves, an analyst at eMarketer, noted that Amazon is under short-term pressure to balance its long-term investments in developing AI capabilities.
The specifics of this latest round of job cuts remain somewhat unclear, with the possibility of figures changing in response to shifts in Amazon’s financial priorities. Reports indicate that the human resources division could face cuts of around 15%.
In the tech sector, job losses have been considerable this year, with approximately 98,000 layoffs documented across 216 companies, according to Layoffs.fyi. In total, around 153,000 job losses were reported for all of 2024.
Meanwhile, Amazon’s Amazon Web Services (AWS), its most profitable segment, reported second-quarter sales of $30.9 billion—a 17.5% increase that underperformed compared to its competitors, Microsoft and Google Cloud, which saw 39% and 32% growth, respectively. For the third quarter, estimates suggest AWS sales will rise about 18% to $32 billion, though reflecting a slowdown compared to the 19% increase seen last year. Recently, AWS also faced scrutiny following a significant internet outage that disrupted numerous popular online services.
Looking ahead, Amazon is preparing for the holiday season, planning to offer approximately 250,000 seasonal jobs, consistent with its hiring strategy over the past two years. Following this announcement, Amazon shares experienced a 1.3% increase, closing at $227.11. The company is expected to report its third-quarter earnings on Thursday.
