Amazon to cut 14,000 corporate jobs as it accelerates AI investments

Amazon is set to cut around 14,000 corporate positions as the company boosts its spending on artificial intelligence and reduces costs across operations.

Teams and employees affected by the layoffs will be informed on Tuesday.

CEO Andy Jassy, who has been focused on cutting expenses since taking over in 2021, had earlier indicated that generative AI would likely lead to a smaller corporate workforce over the next few years. In June, he said Amazon had already built or was developing over 1,000 generative AI services and applications, describing that number as only a “small fraction” of what the company plans to create.

Jassy urged employees to support Amazon’s growing AI initiatives.

Earlier this year, the company revealed plans to invest $10 billion in a new campus in North Carolina to expand its cloud computing and artificial intelligence infrastructure.

Since the beginning of 2024, Amazon has pledged about $10 billion each toward data center projects in Mississippi, Indiana, Ohio, and North Carolina. The company is rapidly building its infrastructure to compete with tech giants such as OpenAI, Google, and Microsoft to meet rising demand for AI-driven products.

In a May conference call with industry analysts, Jassy said the growth potential for Amazon Web Services (AWS) is significant.

He said that if one believed their mission was to make customers’ lives easier and better every day, and that every customer experience would be reinvented with AI, then they would invest very aggressively in AI — which was exactly what they were doing. He added that this could be seen in the more than 1,000 AI applications being built across Amazon and in the company’s next generation of Alexa, named Alexa+.

On Tuesday, Amazon said it was also working to reduce bureaucracy within the organization.

Beth Galetti, Senior Vice President of People Experience and Technology at Amazon, said in a message to employees that the reductions being announced were a continuation of the company’s efforts to become even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure investment in its biggest priorities and in what mattered most to customers’ current and future needs.

Galetti noted that most affected employees will have 90 days to search for new roles within the company. Those who cannot secure new positions or choose not to will receive transitional assistance, including severance pay, outplacement services, and health insurance benefits.

Amazon currently employs about 350,000 corporate staff and a total of roughly 1.56 million workers worldwide. The announced job cuts represent about 4% of its corporate workforce.

Neil Saunders, managing director of GlobalData, said that the layoffs represented a deep cleaning of Amazon’s corporate workforce. He added that, unlike the layoffs at Target, Amazon was operating from a position of strength, noting that the company had been experiencing good growth and still had significant room for further expansion both in the U.S. and overseas.

However, Saunders cautioned that the company still faced external challenges. He said that Amazon needed to take action if it wanted to maintain strong bottom-line performance, especially given the scale of its investments in areas such as logistics and AI. He added that, in some ways, this marked a tipping point from reliance on human capital toward a focus on technological infrastructure.

Amazon is scheduled to report its quarterly financial results on Thursday.