Amazon Announces Second Round of Job Cuts Amid Efficiency Push

Amazon confirmed it had made 16,000 corporate job cuts on Wednesday, completing a plan for around 30,000 employees since October. The company announced plans to close its remaining brick-and-mortar Fresh grocery stores and Go markets after years of effort, as well as dropping its Amazon One biometric payment system.

The job cuts represent nearly ten percent of Amazon’s corporate workforce and mark the largest in its three-decade history, surpassing the 27,000 reductions made between late 2022 and early 2023. Top human resources executive Beth Galetti stated that these measures were necessary to “reduce layers, increase ownership, and remove bureaucracy.” She also hinted at further reductions, saying some teams will continue to make adjustments as appropriate.

The layoffs are part of a broader plan by CEO Andy Jassy aimed at addressing issues like bureaucracy and underperforming businesses. Reuters reported in early October that Amazon was planning an additional round of cuts due to concerns over AI usage and shifting corporate culture. The latest cuts come after the company announced 14,000 job reductions earlier this year.

Amazon also acknowledged it had overhired during the pandemic when demand for online shopping surged. “Some of you might ask if this is the beginning of a new rhythm – where we announce broad reductions every few months,” Galetti wrote in her note. “That’s not our plan,” she added, but did not deny rumors that the cuts were part of an ongoing restructuring effort.

On Tuesday, Amazon mistakenly sent out an email mentioning the layoff plans as “Project Dawn” to some AWS staff, unsettling thousands of workers. While a full scope wasn’t yet clear, employees from various AWS units, Alexa, Prime Video, devices, advertising, and last-mile delivery services indicated they had been impacted via emails.

The latest rounds of layoffs also highlight how artificial intelligence is changing corporate workforce dynamics. AI assistants are helping with routine administrative tasks and complex coding issues at a rapid pace and precision, driving adoption in many enterprises. CEO Jassy noted that rising AI usage would lead to more automation and job losses within corporations.

Despite recent cutbacks, Amazon continues to invest heavily in robotics for its e-commerce operations, aiming to speed up packaging and deliveries while reducing reliance on human labor. The company’s shares were up slightly less than 1% in pre-market trading ahead of its quarterly results announcement next week.