Amazon to Cut Thousands of Jobs, CEO Jassy Clarifies It’s Not about Costs
Amazon is set to eliminate approximately 14,000 corporate jobs starting next week. This announcement marks the second major wave of layoffs for the company since October 2022. Combined with the previous cuts, the total job reductions will reach around 30,000 positions, officially the largest layoff in Amazon’s history.
Details of the Layoffs
CEO Andy Jassy has clarified that these job cuts are not driven by cost concerns or advancements in artificial intelligence (AI). Instead, the decision is rooted in addressing excessive bureaucracy and organizational structure within the company. The upcoming layoffs will impact several divisions, including:
- Amazon Web Services (AWS)
- Retail Operations
- Prime Video
- Human Resources (People Experience and Technology)
Background on Layoff Trends
This round of layoffs, anticipated to mirror the October cuts, comes amid contradictory messaging regarding the reasons behind the reductions. Initially, the company referred to the transformative role of AI as a factor, but Jassy later emphasized that the focus should be on company culture.
During a third-quarter earnings call, he stated, “It’s not really financially driven, and it’s not even really AI-driven. It’s culture.” Jassy has pointed to eliminating layers of management as crucial to restoring agility within the organization.
Impact on Workforce
The planned layoffs represent nearly 10% of Amazon’s 350,000 corporate employees, yet they make up less than 2% of the company’s entire workforce of approximately 1.58 million. Most of these employees work in warehousing and fulfillment roles.
Support for Affected Employees
Beth Galetti, Amazon’s Senior Vice President of PXT, addressed the paradox of job cuts during a period of strong business performance. She noted that organizational efficiency is key to maintaining competitiveness.
For employees affected by the cuts, Amazon will offer resources similar to those provided in previous layoffs, including severance packages, outplacement services, and extended health benefits. The company had previously allowed employees from the initial round 90 days to find new roles internally or externally, and similar support will be available this time.
Changes and Initiatives
To further streamline operations, Jassy has implemented an anonymous feedback system that has garnered over 1,500 responses since its inception and led to more than 450 changes in processes. Additionally, he has enforced a strict five-day in-office work requirement, one of the most rigid policies in the tech sector, though it has not produced the voluntary resignation rates that Amazon expected.
