Amazon to cut 14k jobs to operate ‘more leanly’ in age of AI

Global behemoth Amazon is set to reduce its headcount worldwide by approximately 14,000, creating “fewer layers” at a time of rapid technological change.

In a statement posted earlier this week, Amazon senior vice president of people experience and technology Beth Galetti unveiled organisational changes that will see the company reduce headcount in some areas and make hires in others, for a net headcount reduction of 14,000.

“We’re working hard to support everyone whose role is impacted, including offering most employees 90 days to look for a new role internally (the timing will vary some based on local laws), and our recruiting teams will prioritise internal candidates to help as many people as possible find new roles within Amazon,” she said.

“For our teammates who are unable to find a new role at Amazon or who choose not to look for one, we’ll offer them transition support, including severance pay, outplacement services, health insurance benefits, and more.”

The move is the latest announcement from a major corporation to unveil large-scale headcount reductions: earlier this week, UTS unveiled a proposal to axe 209 roles in the next phase of its cost-cutting plan; two weeks ago, Nestle announced plans to cut 16,000 jobs in the next two years; earlier this month, Lufthansa said it would replace 4,000 staff with AI by 2030; in September, ANZ announced it would cut 3,500 jobs in the coming 12 months; last month, Fiverr said it would cut 250 jobs to be an “AI-first company; and in July, Recruit Holdings (which owns Indeed and Glassdoor) said it would cut 1,300 roles, in the face of AI’s rise.

Some may ask, Galetti continued, why Amazon is reducing roles when the company is performing as well as it is.

“Across our businesses, we’re delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones),” she said.

“We’re convinced that we need to be organised more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.”

Last year, Amazon chief executive Andy Jassy wrote that the company wants to operate like the world’s largest start-up and stressed the importance of having the right structure to drive that level of speed and ownership and the need to be set up to invent, collaborate, be connected, and deliver the absolute best for customers.

Many of Amazon’s workers, Galetti wrote, “have put significant effort into that work of strengthening your organisations by reducing layers, increasing ownership, and helping reduce bureaucracy”.

“We’re already seeing the results, with teams moving faster and many Amazonians feeling more ownership, and the S-team and I appreciate all the work you’ve done. The reductions we’re sharing today are a continuation of this work to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs,” she said.