- Job cuts may affect human resources, devices, services and operations.
- CEO Jassy aims to reduce bureaucracy and increase the use of AI.
- Amazon shares rose 1.2% to $226.97 on Monday.
SAN FRANCISCO: Amazon plans to cut up to 30,000 corporate jobs starting Tuesday, as the company cuts spending and offsets excessive hiring during the pandemic’s peak demand, according to three people familiar with the matter.
This figure represents a small percentage of Amazon’s 1.55 million employees, but almost 10% of its approximately 350,000 employees. It would be Amazon’s largest job cut since late 2022, when the company began cutting about 27,000 positions.
An Amazon spokesperson declined to comment.
Amazon has cut a smaller number of jobs over the past two years across several divisions, including devices, communications and podcasting. The reductions beginning this week could affect various divisions, including human resources, known as People Experience and Technology or PXT; operations, devices and services; and Amazon Web Services, the sources said.
Managers of affected teams were asked to undergo training Monday on how to communicate with staff following email notifications that will begin going out Tuesday morning, the sources said.
Amazon CEO Andy Jassy is launching an initiative to reduce what he describes as excess bureaucracy, including reducing the number of managers. He set up an anonymous complaint line to identify inefficiencies that prompted some 1,500 responses and more than 450 process changes, he said earlier this year.
Jassy said in June that increased use of artificial intelligence tools would likely lead to further job losses, particularly through the automation of repetitive and routine tasks.
“This latest move indicates that Amazon is likely realizing enough productivity gains from AI within corporate teams to support a substantial reduction in headcount,” said Sky Canaves, an eMarketer analyst. “Amazon has also been under short-term pressure to offset long-term investments in building its AI infrastructure.”
The scale of this round of job cuts was not immediately clear. People familiar with the matter said that figure could change over time, as Amazon’s financial priorities evolve. Fortune previously reported that the human resources division could be targeted with a reduction of around 15%.
A program launched earlier this year to bring employees back to the office five days a week, among the strictest in the tech sector, has failed to generate enough attrition, two of the people interviewed said, citing that as another reason for the scale of the layoffs.
Some of the employees who don’t come in daily because they live far from the company’s offices, or for other reasons, are told they voluntarily left Amazon and must leave without severance, a savings for the company.
Layoffs.fyi, a website that tracks job cuts in the tech sector, estimates that about 98,000 jobs have been lost so far this year among 216 companies. For all of 2024, that figure was 153,000.
Amazon’s largest profit center, cloud computing unit AWS, reported second-quarter revenue of $30.9 billion, an increase of 17.5%, well below gains of 39% for Microsoft’s Azure and 32% for Alphabet’s Google Cloud.
Estimates indicate that AWS will have increased its third-quarter sales by about 18% to $32 billion, a slight slowdown from last year’s 19% increase. AWS is still reeling from a roughly 15-hour internet outage last week that took down many of the most popular online services, like Snapchat and Venmo.
Amazon seems to be expecting another big holiday sales season. It plans to offer 250,000 seasonal jobs to help, among other things, meet the needs of warehouse staff, as in the previous two years.
Amazon also announced Friday a reorganization of a segment of its PXT unit focused on diversity initiatives, a memo reviewed by Reuters showed. The changes largely involved promoting people into new roles.
Amazon shares rose 1.2% to $226.97 on Monday. The company plans to report its third-quarter results on Thursday.
