Amazon has announced that it will be laying off approximately 14,000 office workers. The company wants to become ‘leaner and more agile’, with AI expenditure as a cost item that would necessitate the layoffs. It will be the largest layoff in Amazon’s history, with a larger figure than the current 14,000 layoffs expected.
Beth Galetti, Senior Vice President of People Experience and Technology at Amazon, shared the message with all employees on Tuesday. The reorganization aims to reduce the number of management layers and cut red tape. The company wants to be able to move faster and embed more ownership within the organization.
“We need to be organized with fewer layers and more ownership so we can move as quickly as possible for our customers and business,” Galetti said in her memo. The reorganization is a continuation of work that began last year, when CEO Andy Jassy shared a similar message about strengthening the company culture.
However, this is far from the first time Amazon has made significant cuts to its workforce. In 2023 , the company announced two rounds of layoffs of 18,000 and 9,000 employees, respectively, both times citing difficult macroeconomic conditions. The cloud division AWS was also affected, but it is not clear whether this will happen here as well.
Employees are given 90 days
Affected employees will have 90 days to look for a new role internally. Amazon’s recruitment teams will give priority to these internal candidates. For employees who do not find a new position or are not looking for one, Amazon is offering transition support. This package includes severance pay, outplacement services, and healthcare.
The layoffs mainly affect corporate functions. However, the company will continue to recruit in what it calls “strategic areas.” Amazon expects to continue this approach in 2026: recruiting where necessary, but also further cutting management layers and implementing efficiency improvements.
AI as transformative technology
In its internal communications, Amazon emphasizes the importance of AI. This has become a familiar theme in such announcements of layoffs within the tech world. “This generation of AI is the most transformative technology we’ve seen since the internet,” the memo states. It enables companies to innovate much faster than before, both in existing market segments and in entirely new ones. Listed tech companies are also regularly rewarded with green figures when they announce layoffs to reduce personnel costs for investments elsewhere.
The company therefore wants to focus heavily on generative AI, which Amazon refers to as one of its “biggest bets.” A question that may arise is: why lay off employees if the company is doing well? “We deliver great customer experiences every day, innovate at a rapid pace, and produce strong business results,” Galetti acknowledges. “What we need to remember is that the world is changing rapidly.” The speed at which AI technology is developing would cause problems at Amazon if there were apparently too many managers.
The layoffs can mainly be explained by the earlier wave of new hires during the coronavirus crisis. At the time, tech companies could barely keep up with the rapidly growing demand for digital services, resulting in fairly sudden increases in staffing levels. Times are changing, and we seem to be returning to the trend line that applied before the coronavirus. AI is often used as an excuse for layoffs; it remains to be seen whether this will change in the long run.
Historical context
Amazon is not the only Big Tech player making significant cuts to its workforce. IBM also announced new rounds of layoffs this year, as did Microsoft, which laid off roughly 25,000 employees. The tech sector is struggling to find the right balance between growth during favorable times and adapting to changing market conditions. There is also hope that AI investments elsewhere will compensate for this, so that investors do not see a sharp increase in costs per quarter.