(Image source from: Bloomberg)
Amazon is cutting around 16,000 office positions in its second wave of large layoffs in just three months. The big technology company has mentioned that it intends to use advanced artificial intelligence to take over some corporate roles. It has also been trimming a workforce that grew significantly during the pandemic. Beth Galetti, a high-ranking vice president at Amazon, shared in a blog message on Wednesday that the company is "simplifying structures, boosting responsibility, and getting rid of unnecessary processes. " The company did not specify which departments would be affected or where the job losses would happen. This recent job reduction comes after another set of layoffs in October when Amazon announced it was letting go of 14,000 employees. Some divisions completed their "organizational adjustments" in October, while others just finished now, Galetti noted.
She mentioned that employees in the U. S. would have 90 days to search for new positions within the company. Those who do not succeed or prefer not to find other roles will be given severance pay, job placement help, and health insurance benefits, she stated. "While we are implementing these changes, we will keep hiring and investing in important areas and roles that are vital for our future," Galetti explained. CEO Andy Jassy, who has been aggressively reducing expenses since taking over from founder Jeff Bezos in 2021, stated in June that he expected generative AI to shrink Amazon's corporate staff in the upcoming years. The layoffs announced on Wednesday are the largest for Amazon since 2023 when the company laid off 27,000 workers. At the same time, Amazon and other major tech and retail firms have eliminated thousands of jobs to align costs following the COVID-19 pandemic. Amazon's employee count doubled as many people remained at home and increased online shopping.
These job losses are occurring at a company that is financially stable. In its latest quarter, Amazon's profits surged nearly 40% to around $21 billion, and its revenue increased to over $180 billion.
Towards the end of last year after layoffs, Jassy remarked that the job cuts were not due to the company's financial situation or AI. "It's about culture," he stated in October. "As you expand quickly like we did over several years, the size of the business, the number of employees, the locations, and the types of businesses you operate in grow, resulting in having many more people than before and creating more layers. " Hiring has slowed down in the U. S., and in December, the country only added a small number of 50,000 jobs, which is almost unchanged from a revised figure of 56,000 in November. Labor statistics indicate that businesses are hesitant to hire additional workers even as the economy has started to improve. Many companies hired heavily after the pandemic and no longer have a need to fill more positions. Others are hesitant due to the widespread uncertainty created by President Donald Trump's shifting tariff policies, high inflation, and the rise of artificial intelligence, which could change or even eliminate certain jobs.
While experts in economics have referred to the job market in the United States as a place where companies do not hire or fire, several businesses have reported they are reducing their workforce, even this week. On Tuesday, UPS announced its intention to eliminate as many as 30,000 jobs in operational roles this year through voluntary departures and severance packages, as the delivery service decreases shipments from its biggest client, Amazon. This announcement comes after UPS already cut 34,000 jobs in October and ceased operations at 93 of its leased and owned facilities during the first nine months of the previous year. Also on Tuesday, Pinterest revealed it would be letting go of nearly 15% of its employees as part of a larger reorganization that aims to redirect more of its funds towards artificial intelligence. Shares of Amazon Inc., located in Seattle, experienced a slight increase just before the market opened on Wednesday.
