Amazon is preparing to cut up to 14,000 corporate positions, representing nearly 10% of that portion of its workforce. According to three people familiar with the matter, the wave of layoffs – the largest since the end of 2022 – is expected to start as early as Tuesday.
The move is often explained as a simple correction of overstaffing from the pandemic period. However, deeper analysis indicates that it is part of a broader strategy pushed by the CEO, Andy Jassy, focused on absolute efficiency.
Jassy has spoken publicly for months about combating ‘excess bureaucracy’ and reducing the number of managers. At the same time, he signalled that the increased use of AI tools would lead to further reductions, automating repetitive tasks.
The move “signals that Amazon is likely realising enough AI-driven productivity gains” to justify such a large reduction. The company is also under pressure to compensate for its massive long-term investment in AI infrastructure.
Cuts are expected to affect various departments, including HR (called PXT), operations, devices and a key cloud unit, Amazon Web Services.
A key ‘internal’ factor, sources point out, is the failure of the restrictive return to office (RTO) policy. Introduced at the beginning of the year, the requirement to work stationary five days a week – one of the toughest in Big Tech – did not trigger a sufficient wave of voluntary departures. The company hoped for a ‘natural’ reduction, which did not happen, forcing managers to actively cut jobs.
These decisions coincide with a marked slowdown in AWS, Amazon’s main profit driver. While the cloud unit is still growing (17.5% in Q2), it is growing much more slowly than its main competitors Microsoft Azure (up 39%) and Google Cloud (32%). Pressure to cut costs across the corporation is increasing as the growth rate of the ‘hen that lays the golden eggs’ slows.
Despite deep cuts in corporate structures, the logistical core of the company is gearing up for a peak. For the upcoming festive season, Amazon plans to hire 250,000 seasonal workers – the same number as in previous years. An Amazon spokesperson declined to comment on the layoffs.
