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Amazon, a titan in the e-commerce industry, has announced its decision to significantly increase its investments in artificial intelligence technology. This development comes alongside a major restructuring move, with the company revealing plans to eliminate up to 14,000 corporate positions.
In a statement issued on Tuesday, Amazon confirmed the layoffs, which had been anticipated following reports from various media outlets. The company emphasized that these workforce reductions are a strategic effort to streamline operations and better allocate resources toward innovation and customer-centric projects.
Beth Galetti, Amazon’s senior vice president of people experience and technology, explained, “The reductions we’re sharing today are a continuation of this work to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”
In response to the layoffs, Amazon has assured affected employees of substantial support. The company plans to offer most of those impacted a three-month period to seek other opportunities within Amazon. This timeline may vary based on local legal requirements. Additionally, Amazon is committed to providing severance packages, outplacement services, health insurance benefits, and more for those who are unable or choose not to remain with the company.
Amazon said it would give most employees who are impacted by the layoffs three months to look for a new role internally, though the timing may depend on local laws. Additionally, the company said it would offer severance pay, outplacement services, health insurance benefits and more to those who cannot or choose not to stay with Amazon.
“Looking ahead to 2026, as Andy talked about earlier this year, we expect to continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains,” Galetti said.
“Some may ask why we’re reducing roles when the company is performing well,” Galetti continued. “This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones). We’re convinced we need to be more leanly organized, with fewer layers and greater ownership, to move as quickly as possible for our customers and the business.”
Reuters previously reported on Monday that Amazon planned to cut as many as 30,000 corporate jobs starting on Tuesday, nearly double the job cuts announced.
While the layoffs announced Tuesday represent a small percentage of Amazon’s 1.55 million total employees, it would be about 4% of the company’s roughly 350,000 corporate employees.
Up until 2022, mass layoffs had been rare at the Seattle-based company. Since then, there have been a few rounds of job eliminations impacting thousands. In 2023, the company cut some 27,000 jobs, according to Associated Press reporting.
Earlier this year, Amazon CEO Andy Jassy said he believed generative artificial intelligence would reduce the company’s corporate workforce in the next few years as the online giant begins to increase its usage of the technology.
Like other tech companies, including Facebook parent Meta and Google parent Alphabet, Amazon ramped up hiring during the pandemic to meet the demand from homebound Americans that were increasingly buying stuff online to keep themselves safe from the virus. But demand slowed as the worst of the pandemic eased.
The Associated Press contributed to this report.