Amazon will cut about 14,000 corporate jobs as the online retail giant increases spending on artificial intelligence while cutting costs elsewhere.
CEO Andy Jassy, who has been aggressively seeking to cut costs since becoming CEO in 2021, said in June that he expects generative artificial intelligence to reduce Amazon's corporate workforce in the next few years.
CBC News reached out to an Amazon spokesperson to see if the layoffs would impact any Canadian employees and did not receive a response.
Jassy said at the time that Amazon was developing or building more than 1,000 generative AI services and applications, but that figure represented a “small fraction” of what it plans to create.
Jassy encouraged employees to join the company's plans to create artificial intelligence. Earlier that month, Amazon announced it plans to invest US$10 billion to build a campus in North Carolina to expand its cloud computing and artificial intelligence infrastructure.
Since the start of 2024, Amazon has committed about $10 billion to data center projects in Mississippi, Indiana, Ohio and North Carolina as it ramps up its infrastructure to compete with other tech giants and meet growing demand for artificial intelligence products.
Amazon competes in the field of artificial intelligence with such giants as OpenAI, Google and Microsoft. In a conference call with industry analysts in May, Jassy said the growth potential for the company's AWS business is enormous.
“If you believe that your mission is to make customers' lives easier and better every day, and you believe that every customer experience is going to be reinvented with AI, you're going to invest very aggressively in AI, and that's what we're doing,” he said.
The Internet giant is cutting bureaucracy and “relocating resources,” Beth Galetti, senior vice president of human resources and technology at Amazon, said in a message to employees Tuesday.
Teams and individuals affected by job cuts will be notified on Tuesday. Most workers will be given 90 days to find a new position within the company, Galetti said. Those who are unable to find a new position with the company or choose not to seek one will be provided with transition support, including severance pay, outplacement services and health insurance benefits.
Global workforce of over a million people
Amazon has approximately 350,000 corporate employees and a total workforce of approximately 1.56 million. The cuts announced Tuesday represent roughly four percent of the corporate workforce reduction.
Amazon's workforce has doubled during the pandemic as millions of people stayed home and increased online spending. In the years that followed, big tech and retail companies cut thousands of jobs to clean up costs.
The cuts announced Tuesday suggest Amazon is still trying to get the size of its workforce right, and it may not be over yet. It was Amazon's biggest cull since 2023, when the company cut 27,000 jobs. Amazon has not said whether there will be further job cuts.
But the labor market, which has been the mainstay of the U.S. economy for years, is showing signs of weakening. Layoffs have been limited, but so has hiring.
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Government hiring data is not released during the government shutdown, but earlier this month a study by payroll company ADP showed a surprising 32,000 private sector job losses in September.
Many retailers are moving away from seasonal hiring this year due to uncertainty about the U.S. economy and tariffs. However, this month Amazon said it would hire 250,000 seasonal workers, the same as last year's holiday season.
Neil Saunders, managing director of GlobalData, said in a statement that the layoffs “represent a deep purge of Amazon's corporate workforce.”
“Unlike Target’s layoffs, Amazon is operating from a position of strength,” he said. “The company is experiencing good growth rates and still has plenty of room for further expansion both in the U.S. and internationally.”
Amazon will release quarterly financial results on Thursday. In the most recent quarter, the company reported sales growth of 17.5% for its cloud computing division, Amazon Web Services.
But Saunders noted that Amazon is not immune to external factors as global markets tighten and cost bases rise.
“If the company wants to continue to see good results, it needs to act. This is especially true given the amount of investment the company is making in areas such as logistics and artificial intelligence,” he said.
“In some ways, this is a tipping point from human capital to technology infrastructure.”
