Amazon is cutting 14,000 roles in a bid to ‘operate like the world's largest startup’

Amazon has confirmed massive job cuts after reports suggested the company was planning to slash as many as 30,000 corporate roles.

Media reports had suggested the cuts would arrive today and impact as many as one-in-ten corporate employees.

However, Amazon has now confirmed the layoffs, revealing the move will see around 14,000 employees cut. Notably, that includes hiring to fill necessary posts, suggesting the total number of redundancies could be higher.

In a blog post relaying a message sent to employees, Beth Galetti, SVP of People Experience and Technology at Amazon, said the job cuts were part of efforts to "operate like the world's largest startup" by reducing bureaucracy.

"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.

Galetti also pointed to the rise of AI as one motivation for the cuts.

"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 added.

"We’re convicted that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business."

In July, Amazon posted operating income of $19.2 billion on revenue of $167.7 billion in its last quarter, and is set to release its next earnings statement on Thursday.

"Some may ask why we’re reducing roles when the company is performing well. 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."

Amazon has implemented massive cuts before. Across 2022 and 2023 it slashed more than 27,000 jobs during what was a challenging period for workers across the tech sector, with several hundred thousand employees cut across a range of major industry players.

Amazon layoff rumors have been simmering away

The confirmation of the layoffs follows intense speculation about the scale of the cuts at Amazon. Reuters had reported that 30,000 jobs were at risk, for example, with sources telling the publication the company aimed to reduce expenses and headcount as a result of pandemic-era overhiring.

These cuts were expected to impact divisions including HR; operations devices and services; and AWS, the report noted. Email notifications of job cuts will begin today, Reuters added, with managers given extra training for redundancies yesterday.

That was confirmed by separate reports by CNBC and the Wall Street Journal, the latter of which noted the cuts would start this week and continue for some time.

According to the WSJ, the layoffs will also impact staff in advertising and other business units. These reports follow initial rumors of a round of job cuts that started two weeks ago.

Amazon has more than 1.5 million employees, of which 350,000 are deemed corporate, suggesting such cuts would total nearly one-in-ten workers.

AI or overhiring – or both?

Beyond Galetti's explanation to staff, what's behind the cuts? Reuters noted that Amazon CEO Andy Jassy has previously announced plans to cut internal bureaucracy, with a target of increasing worker-to-manager rations by 15% this year.

The company even set up an anonymous email address for staff to complain about inefficiencies that's received 1,500 responses.

“I would say bureaucracy is really anathema to startups and to entrepreneurial organizations,” Jassy said at an event in September, according to CNBC.

"As you get larger, it’s really easy to accumulate bureaucracy, a lot of bureaucracy that you may not see."

Two Reuters sources noted that Amazon had hoped more people would quit following Amazon's strict return to office mandate, and now faces laying off a higher number of staff.

Any staff failing to meet that mandate have been told they've "voluntarily quit" and will not receive severance, the Reuters sources said.

However, over the summer Jassy also warned that the Amazon workforce should brace for impact from AI, telling staff to be "curious" and become "conversant" in the technology.

"We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs," Jassy wrote in a memo to employees.

"It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company."

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