Amazon is laying off 16,000 employees as AI battle intensifies

By Jordan Valinsky, CNN

New York (CNN) — Amazon is laying off 16,000 employees, the company’s second round of large-scale job reductions in three months as it fights to improve its standing in the battle for AI supremacy.

In a blog post Wednesday, the company said it needed to reduce red tape to increase its decision-making speed.

“We’ve been working to strengthen our organization by reducing layers, increasing ownership, and removing bureaucracy,” said Beth Galetti, Amazon’s senior vice president of people.

Amazon in late October announced it was cutting 14,000 corporate employees, following a directive from CEO Andy Jassy’s vision of operating like the world’s biggest startup. He wants the company to remain nimble so it can adapt and change quickly as AI upends the technology sector.

Amazon is America’s second-largest private employer, behind Walmart. It has over 350,000 corporate employees, according to a 2024 survey filed to the US Equal Employment Opportunity Commission. The culmination of both the recent rounds of cuts represent about 9% of the company’s overall office staff.

Galetti said in the blog post that the waves of layoffs won’t become a “new rhythm,” even though Jassy predicted Amazon would continue to reduce its employment rolls because of AI. Instead, Amazon is evaluating the “ownership, speed, and capacity to invent for customers, and make adjustments as appropriate,” Galetti said.

She added, however, that Amazon will hire strategically to ramp up in parts of the business that are critical to the company’s future.

Amazon is in stiff competition with Microsoft, Google, Meta, OpenAI and a host of other technology companies that are battling to ramp up computing power and large language models that they believe will power the economy of the future. That’s an expensive endeavor, but Jassy has said these layoffs are about efficiency rather than cost savings.

Layoffs will begin Wednesday across the company. Most employees will be given 90 days to look for new roles internally, while people who aren’t rehired at Amazon will be given severance pay and additional benefits, the company said.

The layoffs were reportedly announced to staff Tuesday night in an internal email. That memo was apparently sent inadvertently, because it referred to the blog post that wasn’t published until Wednesday morning.

Amazon separately announced Tuesday it would close its Amazon Fresh and Amazon Go grocery businesses, as it doubles down on its Whole Foods branded stores.

AI’s impact

Jassy has been outspoken about AI’s impact on Amazon. Last year, he wrote in a blog post to employees that efficiency gains from the technology would allow the company to reduce its workforce.

“As we roll out more Generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” he bluntly admitted.

Jassy said Amazon wasn’t unique in that respect: He envisioned billions of AI agents being put into service across every company and field.

“Many of these agents have yet to be built, but make no mistake, they’re coming, and coming fast,” Jassy said.

Despite the angst that AI is taking white-collar jobs, the fear that it’s broadly happening is overblown, according to a report from Vanguard.

In fact, jobs that are highly exposed to AI automation are growing faster than they did prior to the pandemic – even faster than all other occupations, the investment firm recently said.

The findings don’t necessarily signal an all-clear for workers worried about AI disrupting their careers. Some companies have recently reported they’re eliminating some positions because AI can automate entry-level workers’ tasks or make current workers more efficient.

Yet there’s no evidence the technology is doing widespread damage, at least not yet.

This story has been updated with additional developments and context.

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