Amazon plans to cut tens of thousands of corporate jobs starting immediately, according to Reuters.

Although, as the news agency notes, the number was initially estimated at 30,000 positions, and although it represents a small percentage of its total workforce (1.55 million), it amounts to nearly 10% of its roughly 350,000 corporate employees and represents the largest restructuring since late 2022, when it announced 27,000 layoffs. A company spokesman declined to comment initially.

However, after Reuters leaked the information, Amazon made a public statement regarding the plans, confirming the intention to make cuts, but lowering the number to approximately 14,000 jobs.”

The cuts are part of an ongoing effort to cut costs and “squeeze” bureaucracy after the over-hiring during the peak demand period in the pandemic. According to the same reports, multiple parts of the group will be affected: human resources (People Experience & Technology/PXT), operations (operations), devices & services (devices & services), and Amazon Web Services (AWS).

Affected team leaders attended specific training on Monday on how to communicate with staff, with informational emails beginning to be sent out Tuesday morning.

Over the past two years, Amazon has already made smaller waves of cuts in individual units such as devices, communications, and podcasting. At the same time, CEO Andy Jassy is implementing an initiative to tighten the management hierarchy, with a reduction in management ranks and an anonymous complaint hotline. As he reported earlier this year, the hotline attracted about 1,500 messages and led to more than 450 process changes.

Jassy has warned that the increased use of artificial intelligence tools will bring additional streamlining through automation of repetitive tasks.

“This latest move suggests that Amazon is likely achieving sufficient productivity gains thanks to AI within corporate teams to support a significant reduction in headcount,” noted eMarketer analyst Sky Canaves, adding that the group is under short-term pressure to offset long-term investments in AI infrastructure. As Jassy said in June, “Increased use of AI tools will likely lead to further job cuts, particularly through the automation of repetitive tasks.”

Jassy, who took over the reins of Amazon from Jeff Bezos in 2021, has embarked on a campaign to cut costs across the company in recent years. Amazon laid off 27,000 employees between 2022 and 2023, and job cuts have continued since then, albeit on a smaller scale.

With the new wave being for key corporate functions and Amazon Web Services, Amazon is attempting to balance aggressive AI/infrastructure investment with immediate margin improvement, transferring more of its AI productivity gains to its cost base.

Amazon’s announcement

Beth Galetti, Amazon’s senior vice president, wrote in a note to staff that the move will make the company “even stronger” by shifting resources “to ensure we are investing in our biggest bets and what matters most to our customers’ current and future needs.” He acknowledged that some would question the move, given the company’s good performance. In late July, Amazon reported second-quarter results that beat Wall Street expectations in several areas, including a 13% year-over-year increase in sales to $167.7 billion (£125 billion).

However, Ms Galetti said the cuts were necessary as artificial intelligence is “the most transformative technology we’ve seen since the internet” and “allows companies to innovate much faster than ever before”.

“We are convinced that we need to organise ourselves in a leaner way, with fewer layers of hierarchy and more accountability, to move as quickly as possible for our customers and our business,” he added.

The note, shared with Amazon employees on Tuesday, said the company is “working hard to support everyone affected by the change,” including by helping those affected find new jobs within Amazon.

FED chairman: The “apocalypse” in AI hiring is real – Job creation is almost zero

Meanwhile, a darker background to the US labour market has been outlined by Federal Reserve Chairman Jerome Powell. Although unemployment stands at 4.3% and consumption remains resilient, Powell noted that when statistical overstatements in payrolls are corrected, “job creation is almost nil.”

Linking this downturn to the way companies are leveraging AI, the Fed chief noted that CEOs are now openly telling investors that AI allows them to increase productivity with smaller teams. He said a “significant number of companies” have recently announced layoffs or hiring freezes, “many of which explicitly cite AI as the reason.

The message shared with Amazon employees:

“I want to let you know that we are making organizational changes across Amazon that will affect some of our colleagues. There will be communications today from executives to those teams and specific individuals, but we also wanted to share the broader context of what is happening and why.

Last year, Andy published a note on strengthening our culture and teams – explaining how we want to operate as the largest startup in the world, the importance of having the right structure to achieve such speed and accountability, and the need to be structured so that we can invent, collaborate, be connected and deliver the absolute best to customers. Many of you have put considerable effort into this work of strengthening your organisations, reducing levels of hierarchy, increasing accountability and helping to reduce bureaucracy. We’re already seeing the results, with teams moving faster and many Amazonians feeling greater ownership, and the S-team and I appreciate all the work you’ve done. The reductions we are announcing today are a continuation of this effort to become even stronger by further reducing bureaucracy, removing layers and shifting resources to ensure we are investing in our biggest bets and what matters most to our customers’ current and future needs.

While this will involve reductions in some areas and hiring in others, it will mean an overall reduction in our corporate workforce of approximately 14,000 positions. We are working hard to support everyone whose position is affected, including offering most employees 90 days to seek a new role internally (the timing will vary slightly based on local laws), and our staffing teams will prioritize internal candidates to help as many people as possible find new roles within Amazon. For our colleagues who are unable to find a new role at Amazon or who choose not to seek one, we will offer transition support, including severance pay, vocational rehabilitation services, health insurance benefits, and more.

Looking ahead to 2026, as Andy mentioned earlier this year, we expect to continue hiring in key strategic areas while identifying additional areas where we can remove layers, increase accountability, and achieve efficiency gains.

Some may ask why we are reducing positions while the company is performing well. Across all of our businesses, we deliver exceptional customer experiences every day, innovate at a rapid pace, and deliver strong business results. What we need to remember is that the world changes quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and in entirely new ones). We are convinced that we need to be organized more “leanly,” with fewer layers and more ownership, to move as quickly as possible for our customers and the business.

I know of no other company with the breadth of Amazon, the number of exciting, bold bets we make, and all the ways we can make customers’ lives better and easier around the world. I’m inspired by what I see across the company every day, and the S-team and I appreciate everything you do, Beth.”