Amazon is reportedly planning to cut as many as 30,000 corporate jobs starting this week, according to sources familiar with the matter. This figure represents nearly 10% of its roughly 350,000 corporate employees and would mark the company’s largest round of layoffs since it began cutting around 27,000 positions in late 2022.
Scope and Affected Divisions
The cuts, which begin Tuesday morning with email notifications, are expected to impact various divisions, including:
- People Experience and Technology (PXT) (HR)
- Operations
- Devices and Services
- Amazon Web Services (AWS)
Managers of impacted teams reportedly underwent training on Monday regarding communication protocols.
Drivers for the Layoffs
The reductions are part of CEO Andy Jassy’s initiative to slash perceived excess bureaucracy and reduce management layers. Key factors driving the size of these layoffs include:
- AI Automation: Jassy previously indicated that increased use of artificial intelligence tools would likely automate repetitive tasks, leading to job cuts. An analyst noted this signals Amazon is realizing sufficient AI-driven productivity gains.
- Financial Pressure: The need to offset long-term investments in AI infrastructure.
- Stagnant Returns to Office: A stringent five-day-per-week return-to-office program has reportedly failed to generate sufficient attrition, leading to larger layoffs where some non-compliant employees are allegedly being told they quit without severance.
- AWS Slowdown: While AWS remains the largest profit center, its Q2 sales growth of 17.5% was significantly behind rivals Microsoft Azure and Google Cloud, with Q3 estimates showing a slight expected slowdown.
The total number of planned cuts remains fluid, subject to shifts in Amazon’s financial priorities. The company plans to hire 250,000 seasonal warehouse jobs for the upcoming holiday season. Amazon’s stock, however, rose 1.2% in trading on Monday ahead of its Q3 earnings report later this week.
