AI in focus again as Amazon plans largest corporate layoff affecting 14,000 employees

Amazon announced Tuesday it plans to cut around 14,000 corporate positions as the retail giant continues working to lower expenses and focus resources on artificial intelligence projects.

The company explained that the job cuts will help it operate with less red tape and fewer management levels. Amazon wants to put more money into what it calls its most important priorities, especially AI technology.

Beth Galetti, who leads people operations at Amazon, said AI represents the biggest technology shift since the internet arrived. She noted companies can now create new products much faster than before. The executive said Amazon needs a simpler structure with fewer bosses so it can act quickly for customers.

These job losses will be the biggest corporate staff reduction at Amazon. The total cuts might reach 30,000 workers, based on information from people who know about the plans.

Companies bet on AI efficiency

Amazon employs more than 1.54 million workers around the world, making it the country’s second-biggest private employer. Most of those workers handle packages in warehouses. The company has roughly 350,000 people in corporate and technology roles. The 14,000 cuts equal about 4% of that group.

The company said more job cuts will happen next year, though it will keep adding workers in certain important areas.

Amazon joins other businesses cutting staff as AI tools become more common across the tech sector. Companies in technology, banking, cars, and retail have said AI will change how many employees they need.

Many firms believe they can make more money with fewer workers by using AI, which they expect will make operations run better. Amazon’s chief executive Andy Jassy told workers in June that AI will reduce the need for some current jobs while creating demand for different types of work.

Jassy took over from founder Jeff Bezos in 2021. Since then, he has worked to cut spending throughout the company. Amazon eliminated 27,000 positions from 2022 through 2023. Smaller rounds of job cuts have happened since.

Amazon’s post-pandemic workforce adjustment

The company grew its workforce fast during the pandemic when more people shopped online and used cloud computing services. Amazon has since closed projects that lost money. As discussed by Cryptopolitan earlier, the pandemic’s overhiring may be the real culprit in the current spree of layoffs.

This year, the company plans to spend about $100 billion building AI technology. Investors want proof that Amazon’s cloud and AI operations can compete with other tech companies.

Jassy wants Amazon to work like what he calls the world’s biggest startup. Last September, he told office workers they must come in five days each week instead of working from home. He also set a target to remove management layers by early this year.

Amazon will share its third-quarter financial results on Thursday after stock markets close.

The job cuts come as technology companies face pressure to show profits while investing heavily in new AI capabilities. Amazon hopes the leaner structure will help it move faster in a competitive market.

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