- Job cuts may impact human resources, devices, services and operations.
- CEO Jassy aims to reduce bureaucracy and increase the use of AI.
- Amazon shares rose 1.2% to $226.97 on Monday.
SAN FRANCISCO: Amazon plans to cut up to 30,000 corporate jobs starting Tuesday as the company cuts expenses and offsets overhiring during the pandemic’s peak demand, according to three people familiar with the matter.
The figure represents a small percentage of Amazon’s total 1.55 million employees, but almost 10% of its approximately 350,000 corporate employees. This would mark the largest job cuts at Amazon since late 2022, when it began eliminating around 27,000 positions.
An Amazon spokesperson declined to comment.
Amazon has been cutting a smaller number of jobs over the past two years across multiple divisions, including devices, communications and podcasting. The cuts beginning this week may affect a variety of divisions, including human resources, known as People Experience and Technology or PXT; operations, devices and services; and Amazon Web Services, the people said.
Managers of the affected teams were asked to receive training Monday on how to communicate with staff following email notifications that will begin going out Tuesday morning, the people said.
Amazon CEO Andy Jassy is embarking on an initiative to reduce what he has described as excessive bureaucracy, including by reducing the number of managers. It set up an anonymous complaint line to identify inefficiencies that has prompted about 1,500 responses and more than 450 process changes, it said earlier this year.
Jassy said in June that the increased use of artificial intelligence tools would likely lead to more job cuts, particularly through the automation of repetitive and routine tasks.
“This latest move indicates that Amazon is likely making enough AI-driven productivity gains within corporate teams to withstand a substantial reduction in force,” said eMarketer analyst Sky Canaves. “Amazon has also been under short-term pressure to offset long-term investments in building out its AI infrastructure.”
The full extent of this round of job cuts was not immediately clear. People familiar with the matter said the figure could change over time as Amazon’s financial priorities change. Fortune previously reported that the human resources division could take a cut of about 15%.
A program started earlier this year to return employees to the office five days a week, one of the most stringent in the tech sector, has failed to generate enough attrition, two of the people said, citing that as another reason for the size of the layoff.
Some of the employees who do not log in daily because they live far from the corporate offices, or for other reasons, are told that they voluntarily resigned from Amazon and must leave without severance, a savings for the company.
Layoffs.fyi, a website that tracks job cuts in the tech sector, estimated that around 98,000 jobs have been lost so far this year across 216 companies. For all of 2024, the figure was 153,000.
Amazon’s biggest profit center, cloud computing unit AWS, reported second-quarter sales of $30.9 billion, a 17.5% increase that was well below gains of 39% for Microsoft’s Azure and 32% for Alphabet’s Google Cloud.
Estimates indicate that AWS will have increased third-quarter sales by about 18% to $32 billion, a slight slowdown from last year’s 19% increase. AWS is still recovering from a roughly 15-hour internet outage last week that brought down many of the most popular online services, such as Snapchat and Venmo.
Amazon appears to be expecting another great holiday sales season. It plans to offer 250,000 seasonal jobs to help staff warehouses, among other needs, as in the previous two years.
Amazon also announced on Friday a reorganization of a segment of its PXT unit focused on diversity initiatives, a memo reviewed by Reuters presented. The changes largely involved promoting people into new roles.
Amazon shares rose 1.2% to $226.97 on Monday. The company plans to report third-quarter earnings on Thursday.
