Amazon is looking to cut billions of dollars in its operating expenses.
Amazon is preparing for significant job reductions across its corporate divisions, starting this Tuesday. These layoffs come as the company continues to heavily invest in artificial intelligence development, sources familiar with the situation have revealed.
Further corporate staff cuts are anticipated in January, following the crucial holiday shopping period.
Insiders indicate that Amazon aims to slash billions from its operating expenses. Department heads, including those in human resources, have reportedly been given mandates to reduce headcount-related costs by 10 to 15 percent. This round of layoffs is expected to disproportionately affect more senior positions, such as directors, compared to previous reductions.
Earlier reports by Reuters on Monday suggested that these reductions could impact approximately 30,000 jobs, representing nearly 10 percent of Amazon’s total corporate workforce.
Amazon has, so far, declined to comment on these developments.
The company had $18 billion in profit in the latest quarter, and is significantly increasing its investment in data centers crucial for developing advanced AI systems. Capital expenditures, which encompass these data centers, are projected to exceed $120 billion this year—a nearly 50 percent increase from the previous year.
In June, Amazon CEO Andy Jassy informed employees that advancements in AI would naturally lead to a smaller corporate workforce in the coming years. He stated, “We will need fewer people doing some of the jobs that are being done today.” Although AI might open up new roles, Jassy foresaw an overall reduction in corporate staff.
An Amazon facility in Shreveport, La.
Beyond its corporate offices, Amazon is also curbing the expansion of its vast blue-collar workforce, which constitutes the majority of its over 1.5 million employees. Recent reports indicated that the company plans to utilize automation to prevent the hiring of over 600,000 additional warehouse employees within a decade, even as it projects a doubling of item sales.
Widespread layoffs at Amazon last occurred approximately three years ago, when a series of reductions over several months eliminated 27,000 positions. The company’s workforce had surged to over 1.6 million during the early Covid-19 pandemic. Despite significant business growth since then, the total number of employees stood at 1.5 million by the end of June.
Amazon is not alone in its workforce adjustments; several competitors have also announced layoffs. Microsoft cut around 15,000 roles earlier this summer, Target revealed plans to reduce its corporate staff by about 1,800 positions last week, and Meta recently laid off 600 employees.