The full scope of the layoffs remains uncertain and may evolve with Amazon’s shifting financial priorities
Amazon begins to slash 30,000 corporate jobs in largest layoff since 2022: Report
The 10 per cent reduction in jobs, led by CEO Andy Jassy to cut pandemic-era over-hiring and inefficiency, impacts AWS and PXT divisions, agency reports said
After Meta’s recent layoffs in its AI division, news emerges that Amazon is set to cut 30,000 corporate positions starting Tuesday (October 28), marking its largest workforce reduction since 2022.
According to a Reuters report, the cuts, which represent nearly a sizable 10 per cent of its roughly 350,000 corporate employees, appears to be not as significant considering its 1.55 million workforce. In its earlier largest job cut in 2022, Amazon had eliminated around 27,000 jobs.
The company is resorting to the layoffs to reduce expenses and compensation for over-hiring when demand was high in the pandemic era, said the report quoting three people familiar with the matter. Amazon spokesperson has, however, declined to comment to the report.
The impact
The layoffs are expected to impact several divisions, including People Experience and Technology (PXT), operations, devices and services, and Amazon Web Services (AWS). Managers in affected teams received training on Monday to prepare for delivering notifications, which will begin via email on Tuesday.
Inefficiencies identified
CEO Andy Jassy is leading a push to reduce bureaucracy and managerial layers, citing inefficiencies identified through an anonymous complaint line that generated 1,500 responses and over 450 process changes. He also noted in June that AI adoption is driving productivity gains, enabling the automation of routine tasks and contributing to the decision to downsize.
Also read: Amazon plans to replace 160,000 US jobs with robots by 2027: Report
The full scope of the layoffs remains uncertain and may evolve with Amazon’s shifting financial priorities. Reports suggest that the human resources division could face cuts of up to 15 per cent.
Additionally, Amazon’s strict return-to-office policy, requiring five-day in-office attendance, has not led to the expected attrition. Employees failing to comply, often due to living far from corporate hubs, are being classified as having voluntarily resigned, thus forfeiting severance.
Despite the layoffs, Amazon continues to prepare for a robust holiday season, planning to hire 250,000 seasonal workers, which appears to be consistent with previous years.
Modest slowdown
Meanwhile, AWS, Amazon’s most profitable segment, reported Q2 sales of $30.9 billion, a 17.5 per cent increase that lagged behind competitors like Microsoft Azure and Google Cloud. Third-quarter estimates suggest AWS sales will rise to $32 billion, a modest slowdown from last year.
Also read: Amazon plans major layoffs; 15 per cent of HR employees to be hit
On Friday, Amazon also announced a reorganisation within its PXT unit, specifically targeting diversity initiatives, with several employees promoted to new roles.
On Monday, Amazon's stock rose 1.2 per cent to $226.97 ahead of its third-quarter earnings report due Thursday.