Amazon is said to be preparing for another massive round of job cuts, and this one will impact up to 30,000 corporate staff. According to sources, the layoffs are set to begin this Tuesday, 28th October. The primary reason for this is to reduce expenditure and adjust for ‘excess hiring’ that took place amid the pandemic, when demand was raised, according to a Reuters report.
Reuters reported that these cuts are for Amazon’s corporate workers, which is a small fraction of 1.55 million total workers. The company has around 350,000 corporate employees, so 30,000 jobs would be nearly 10% of that group. This would be the biggest layoff at the company since late 2022, when they eliminated around 27,000 jobs.
These layoffs aren’t concentrated in one department. They are likely to be shared across multiple divisions, including human resources, which Amazon refers to as PXT, operations, the devices and services groups, and even Amazon’s most lucrative division, Amazon Web Services (AWS). Sources also stated that managers of those particular teams were given training on Monday, 27th October, on how to break the news to their employees, with email notifications set to begin going out on Tuesday, 28th October.
CEO Andy Jassy has spoken publicly about wishing to reduce “bureaucracy”, including many managers and make the company more efficient, the Reuters report added. Jassy had also stated last June that, as Amazon increasingly relies on artificial intelligence (AI), it would follow that there would be job reductions, as AI can automate much routine work.
Sky Canaves, an eMarketer analyst, commented that this action indicates that Amazon is finally seeing tangible productivity benefits from AI that enable it to cut staff while also contributing to funding their large expenditures in new AI technology.
Reuters added that Amazon’s rigid five-day-a-week return-to-the-office policy didn’t get enough people to leave on their own. Since that didn’t occur, the company is now resorting to these mass layoffs.
Meanwhile, Amazon’s cloud business, AWS, which is usually a huge profit-maker, has been facing challenges. Its sales growth has slowed down from last year’s 19% increase. While its second-quarter sales hit $30.9 billion, that 17.5% increase was way behind competitors like Microsoft’s Azure at 39% growth and Google’s Cloud at 32%.
