Amazon cuts 14,000 corporate jobs due to AI investments
Kyiv • UNN
Amazon is cutting about 14,000 corporate jobs, increasing spending on artificial intelligence while cutting costs in other areas. This is the largest reduction since 2023, when the company laid off 27,000 employees.
Amazon plans to cut about 14,000 corporate positions while increasing investment in artificial intelligence and reducing costs elsewhere. This was reported by the Associated Press, writes UNN.
Details
In June, CEO Andy Jassy, who has been aggressively trying to cut costs since his appointment in 2021, said he expects generative AI to reduce Amazon's corporate team over the next few years.
At the time, Jassy reported that Amazon had over 1,000 generative AI-powered services and applications under development or already created, but that this number was a "small fraction" of what the company plans to develop.
He urged employees to support the company's AI plans after announcing a $10 billion investment to build a campus in North Carolina to expand cloud computing and artificial intelligence infrastructure.
Since the beginning of 2024, Amazon has allocated about $10 billion to data center projects in Mississippi, Indiana, Ohio, and North Carolina, building infrastructure to keep up with other tech giants making breakthroughs in AI. Amazon competes with OpenAI, Google, Microsoft, Meta, and others. In a May conference call with analysts, Jassy said that the growth potential of Amazon Web Services' business is enormous.
If you believe that your mission is to make customers' lives easier and better every day, and that every customer experience will be reimagined with AI, you will invest very heavily in AI, and that is what we are doing. This is evident in the more than 1,000 AI applications we are building at Amazon. This is also evident in our new generation of Alexa, called Alexa+
Teams and individual employees affected by the cuts will be notified on Tuesday. Most employees will have 90 days to find a new position within the company, said Beth Galetti, Senior Vice President of People Experience and Technology at Amazon. Those who cannot find a new position or choose not to will receive transitional support, including severance pay, job placement services, and health insurance.
Addition
Amazon employs about 350,000 corporate employees and a total of about 1.56 million people. The announced cut represents about 4% of the corporate team.
Amazon's headcount doubled during the pandemic, when millions of people stayed home and increased online shopping. In subsequent years, large technology and retail companies cut thousands of jobs to align costs.
The cuts announced on Tuesday indicate that Amazon is still trying to optimize its headcount, and this may not be the last cut. This is the largest cut at Amazon since 2023, when the company laid off 27,000 employees. At that time, the layoffs occurred in waves: 9,000 jobs in March and another 18,000 two months later. Amazon has not yet announced whether there will be further cuts.