Amazon is planning to cut 30,000 corporate jobs beginning on October 28, 2025, according to Reuters (Amazon itself says it will be only 14,000). This will impact employees in the United States, the United Kingdom, and Canada. It is a corporate reduction, representing 10 percent of Amazon’s corporate employees. Amazon doubled its workforce to 1.6 million from 2019 to 2021, but that number dipped to 1.55 million last year.
Amazon staff reduction due to AI automation
Andy Jassy, Chief Executive Officer, says the reason is to reduce the "excess of bureaucracy". The vision is to operate like the world’s biggest startup and to make the company leaner, with fewer layers and more ownership, so Amazon can move more quickly.
However, the key reason may be the increased use of AI that cut jobs by automating repetitive and routine tasks. It seems that AI-driven productivity gains within corporate teams were sufficient for a substantial reduction in force.
Amazon has long-term investments in building out its AI infrastructure and in the short term must offset costs. The company is expected to spend $118 billion in capital expenditures for the year, with much of it going towards building AI and cloud infrastructure.
Beth Galetti, Senior Vice President of People Experience and Technology, says the reduction is necessary because this generation of artificial intelligence is the most transformative technology since the Internet, and it accelerates the pace of innovation across existing and new market segments.
Amazon had more than 1,000 generative artificial intelligence services and applications in progress or built, but that figure was a "small fraction" of what it plans to build.
Amazon shares rose 1.2 percent to $226.97 on Monday following the report.
The company appears to be expecting another big holiday selling season and plans to offer 250,000 seasonal jobs to help staff warehouses, among other needs, which is the same seasonal hiring level as in the prior two years. This contrasts large seasonal warehouse hiring with corporate reductions.
Amazon Web Services
Amazon Web Services, the company’s cloud computing unit, is affected among others.
AWS reported second-quarter sales of $30.9 billion (17.5 percent increase year over year), and that growth was well below gains recorded for Microsoft Azure (39 percent and for Alphabet’s Google Cloud at 32 percent in the same period). This competitive pressure may be driving Amazon to restructure AWS.
The division has been making headlines recently for a fifteen-hour internet outage last week that disrupted many widely used online services.
Amazon Robots
Amazon executives believe the company is on the cusp of a major workplace shift that will replace more than 500,000 jobs with robots. Robotic automation could allow the company to avoid hiring more than 600,000 people by 2033, even while selling twice as many products. Amazon’s automation team expects the company can avoid hiring more than 160,000 people in the United States by 2027.
To mitigate fallout in communities that may lose jobs, Amazon policy avoids using words such as "automation" and "artificial intelligence" when discussing robotics and instead substitutes phrases such as "advanced technology" or the word "cobot" to imply collaboration with humans.
Daron Acemoglu, a professor at the Massachusetts Institute of Technology who studies automation and who won the Nobel Prize in Economic Sciences last year, said that once companies work out how to automate profitably, the practice will spread to other firms.
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