Amazon to cut 10 per cent of workforce amid AI pivot
Amazon is preparing to axe as many as 30,000 corporate jobs worldwide this week, in what could mark its largest round of layoffs since 2022.
The Seattle-based technology giant plans to begin cuts as soon as Tuesday, according to Reuters, targeting around 10 per cent of its 350,000-strong corporate workforce.
Amazon employs more than 1.5 million people globally, including 75,000 in the UK.
The move is part of a cost-cutting drive led by chief executive Andy Jassy, who has spent the past two years streamlining operations following an aggressive hiring spree during the pandemic.
The layoffs are expected to hit several divisions, including human resources, operations, devices and services, and Amazon Web Services (AWS).
An Amazon spokesperson declined to comment on the reports.
AI investment drives restructure
Jassy has previously warned that the rise of generative AI would change the composition of Amazon’s corporate teams, as automation replaces some administrative and support roles.
“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs”, he previously said in June.
Analysts have said the latest move reflects both cost pressures and early productivity gains from AI tools.
“This signals that Amazon is realising enough AI-driven productivity gains within corporate teams to support a substantial reduction in force”, said Sky Canaves, senior analyst at eMarketer.
Reshuffle amid slower growth
The cuts come as Amazon seeks to boost profitability across its core businesses.
AWS, its cloud computing arm, remains the company’s biggest profit centre but has seen growth slow in recent quarters, expanding by around 18 per cent year on year in Q3, behind Microsoft’s Azure and Google Cloud.
Amazon has been paring back smaller teams for months, including in its devices, communications and podcasting units.
Managers in affected departments have reportedly been trained to brief staff as redundancy notices begin rolling out.
The Big Tech also faces challenges in its UK retail division. Last month, Amazon confirmed plans to close all 19 of its Amazon Fresh supermarkets, four years after launching the chain.
Some sites are expected to be converted into Whole Foods Market outlets, while staff will be offered alternative roles.
Despite the latest round of layoffs, Amazon continues to hire seasonal warehouse staff to prepare for the busy holiday shopping period, adding 250,000 temporary roles globally.
Amazon shares rose 1.2 per cent to $226.97 (£170.52) on Monday. The company will be reporting its quarterly earnings on Thursday.