- Cuts can affect HR, units, services, operations.
- CEO Jassy aims to reduce bureaucracy, increase the use of artificial intelligence.
- Amazon shares rose 1.2% to $226.97 on Monday.
SAN FRANCISCO: Amazon plans to cut as many as 30,000 corporate jobs starting Tuesday as the company trims expenses and compensates for overstaffing during the peak of the pandemic, according to three people familiar with the matter.
The number represents a small percentage of Amazon’s 1.55 million total employees, but nearly 10% of its roughly 350,000 corporate employees. This would mark Amazon’s biggest job cuts since late 2022, when it began eliminating about 27,000 positions.
An Amazon spokesman declined to comment.
Amazon has trimmed a smaller number of jobs over the past two years across several divisions, including devices, communications and podcasting. The cuts beginning this week could affect a number of different 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 affected teams were asked to undergo training on Monday on how to communicate with staff following email notifications that began going out Tuesday morning, the people said.
Amazon CEO Andy Jassy is taking an initiative to reduce what he has described as an excess of bureaucracy, including by reducing the number of managers. He installed an anonymous complaint line to identify inefficiencies that has prompted about 1,500 responses and more than 450 process changes, he said earlier this year.
Jassy said in June that the increased use of artificial intelligence tools is likely to lead to further cuts, particularly through the automation of repetitive and routine tasks.
“This latest move signals that Amazon is likely realizing enough AI-driven productivity gains in the company’s teams to support a significant reduction in force,” said Sky Canaves, an eMarketer analyst. “Amazon has also been under short-term pressure to offset the long-term investments in building its AI infrastructure.”
The full extent of this round of cuts was not immediately clear. People familiar with the matter said the number could change over time as Amazon’s financial priorities shift. Fortune previously reported that the human resources department could be targeted for a cut of about 15%.
A program begun early this year to bring employees back to the office five days a week, among tech’s most rigorous, has failed to generate enough attrition, two of the people said, citing that as another reason for the size of the layoffs.
Some of the employees who don’t clock in daily because they live far from the company’s offices or for other reasons are being told that they have voluntarily left Amazon and must leave without severance pay, a savings for the company.
Layoffs.fyi, a website that tracks tech job cuts, estimated that about 98,000 jobs have been lost so far this year among 216 companies. For the whole 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 reeling 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 seems to be expecting another big Christmas season. It plans to offer 250,000 seasonal jobs to help staff stocks, among other needs, the same as in the previous two years.
Amazon also announced Friday a reorganization of a segment of its PXT unit that focused on diversity initiatives, a memo reviewed by Reuters showed. The changes largely involved promoting people to new roles.
Amazon shares rose 1.2% to $226.97 on Monday. The company plans to report earnings for the third quarter on Thursday.
