Amazon has officially announced plans to reduce its global corporate workforce by around 14,000 roles. The company says the decision aims to make operations leaner and more efficient as it invests heavily in artificial intelligence (AI) technologies.
A Major Move Toward an AI-Focused Future
Amazon’s leadership says the restructuring is part of a strategy to realign resources toward innovation and customer-focused projects. The company believes that becoming leaner will help it move faster and adapt to the rapid changes AI is bringing to the business world.
In an internal message, senior vice president Beth Galetti said that Amazon needs to be “more agile and efficient” to strengthen its future growth. She emphasized that AI is the most transformative technology since the Internet, allowing companies to innovate at record speed.
Why Amazon Is Cutting Jobs
The company’s decision to trim thousands of roles may come as a surprise to some, given that Amazon’s financial results remain strong. In the second quarter of this year, Amazon reported sales growth of 13% compared to the previous year, reaching $167.7 billion.
However, the company believes that streamlining its corporate structure will help it stay competitive as it invests more in automation and machine learning tools. Amazon plans to cut down management layers and shift focus toward its biggest priorities and customer needs.
What Happens to Affected Employees
Amazon said it will provide support for employees whose jobs are being eliminated. Those affected will have the chance to apply for other internal positions or receive transition benefits, including severance pay and career guidance.
The company has not yet confirmed how many UK-based employees will be affected. Globally, Amazon employs over 1.5 million people, with about 350,000 in corporate positions, including executive and managerial roles.
A Shift in Strategy Since the Pandemic
Like many major tech companies, Amazon expanded its workforce rapidly during the pandemic to handle the surge in online shopping and digital services. But in recent years, CEO Andy Jassy has focused on cutting costs and investing in AI systems to boost productivity and reduce operational expenses.
Jassy has previously mentioned that AI tools will automate many routine tasks, leading to fewer roles in some departments while creating new ones in emerging areas. He stated that the future workforce will shift toward new types of jobs focused on AI-driven innovation.
The Bigger Picture for Amazon’s Growth
This isn’t the first round of corporate cuts at Amazon. The company laid off around 27,000 employees between 2022 and 2023. Despite strong sales, analysts say investors are cautious about the company’s long-term AI spending.
There are also concerns about slower growth in Amazon Web Services (AWS), its cloud computing division, compared to competitors like Microsoft and Google. Investors are watching closely to see whether Amazon’s AI investments will deliver the expected returns in the coming quarters.
Amazon’s next quarterly results, covering the period ending 30 September, are expected to reveal how well the company is balancing cost-cutting with innovation.
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