Amazon Announces Significant Workforce Reduction Amid AI Push
Amazon has confirmed it is cutting approximately 14,000 corporate jobs in one of the largest workforce reductions in the company's history. The announcement came from Beth Galetti, Amazon's Senior Vice President of People Experience and Technology, who described the move as part of a broader strategy to create a leaner organization better positioned for the AI era.
Strategic Shift Toward AI and Efficiency
The layoffs represent about 4% of Amazon's 350,000-person corporate workforce and are part of what Galetti called a continuation of efforts to 'operate like the world's largest startup'. In her internal memo to employees, she emphasized that 'we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business'.
This restructuring comes as Amazon makes massive investments in artificial intelligence, with the company planning to spend approximately $100 billion in capital expenditures for 2025, primarily focused on AI development for Amazon Web Services (AWS). CEO Andy Jassy has repeatedly described AI as a 'once-in-a-lifetime business opportunity' that requires significant resources.
Support for Affected Employees
Amazon is providing comprehensive support for employees whose roles are being eliminated. Most affected workers will receive 90 days to search for new positions within the company, with Amazon's recruiting teams prioritizing internal candidates. For those unable to find new roles or who choose not to pursue internal opportunities, the company is offering severance packages, outplacement services, and continued health insurance benefits.
'We're working hard to support everyone whose role is impacted,' Galetti stated in her announcement. 'Our recruiting teams will prioritize internal candidates to help as many people as possible find new roles within Amazon.'
Broader Industry Context
The workforce reduction occurs despite Amazon's strong business performance, with the company continuing to deliver 'great customer experiences every day, innovating at a rapid rate, and producing strong business results'. However, Galetti noted that 'the world is changing quickly' and pointed to generative AI as 'the most transformative technology we've seen since the Internet'.
Amazon faces increasing competition in both its e-commerce and cloud computing divisions. The company's AWS unit, while still dominant, confronts intense pressure from Microsoft Azure and Google Cloud, particularly in the AI services market. Meanwhile, Amazon's e-commerce business operates with relatively slim profit margins of around 6%, according to industry analysis.
Looking Ahead to 2026
The company expects to continue this organizational streamlining through 2026, with Galetti noting that Amazon will 'continue hiring in key strategic areas while also finding additional places we can remove layers, increase ownership, and realize efficiency gains'. This suggests that while some areas face reductions, others—particularly those related to AI development and strategic initiatives—will see continued investment and hiring.
Amazon's stock performance has lagged behind the broader market this year, with shares gaining only 3% compared to the Nasdaq Composite's 23% increase. The workforce reduction announcement reflects the company's ongoing efforts to improve efficiency and compete more effectively in the rapidly evolving technology landscape.
The layoffs represent Amazon's latest move in a series of organizational changes aimed at maintaining the company's competitive edge while navigating the challenges and opportunities presented by artificial intelligence and other emerging technologies.