:max_bytes(150000):strip_icc()/GettyImages-2241942850-8386731557524517a9ae1cd323782f46.jpg "Here’s Why Amazon Says It’s Cutting 14,000 Workers While It’s ‘Performing Well’")
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Key Takeaways
- Amazon on Tuesday said it planned to reduce its workforce by about 14,000 jobs.
- The company said it needs to be “organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.”
More big job cuts are coming at Amazon.
Amazon (AMZN), the retail and tech giant, on Tuesday said it would cut around 14,000 jobs from its white-collar workforce. The news made it the latest corporate giant to do so—and one of several big tech companies that are paring back at a time when business is strong. Amazon is expected to reporting growing revenue and profits when it turns in its third-quarter results on Thursday.
In a letter published online, Amazon’s Senior Vice President of People Experience and Technology Beth Galleti admitted that “some may ask why we’re reducing roles when the company is performing well.” Her response:
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. 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). We’re convinced 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.
Why This News Is Significant
Amazon’s planned layoffs are considered its biggest corporate job cuts to date, as the company seeks to streamline operations and redirect spending toward artificial intelligence and other growth priorities. The move reflects a wider trend among tech firms, which are trimming white-collar positions even when posting strong profits, to fund AI investments.
The company said the reduction in workers is aimed at “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.”
Amazon Wants to ‘Be Organized More Leanly, With Fewer Layers’
Amazon said it plans to give affected employees 90 days to see if they would fit in an open position elsewhere in the company. CNBC said that the cuts are expected to be Amazon’s largest corporate layoffs ever, while Reuters said up to 30,000 workers could be laid off in future stages of the same plan, citing people familiar with the matter.
Amazon in its Tuesday letter said that it expected to find “additional places to remove layers, increase ownership, and realize efficiency gains.” The company declined to address the specific number reported by Reuters.
Large companies across tech and other sectors have also lately made cuts to their white-collar workforces, among them Oracle (ORCL), Microsoft (MSFT), and Google parent Alphabet (GOOGL). Analysts have pointed to the tech giants’ plans to spend hundreds of billions on artificial intelligence infrastructure as one explanation for why the companies are looking to lower their headcounts.
Also on Tuesday, shipping giant United Parcel Service (UPS) said it has cut about 34,000 jobs in its operational segment and closed 93 facilities since announcing a restructuring plan earlier this year, along with 14,000 jobs cut in its management ranks.
And online education company Chegg (CHGG) also announced job cuts Tuesday, about 388 roles or 45% of its workforce, citing declining traffic to its educational services because of “the new realities of AI” as Google’s AI overviews reduce traffic to publishers.
—David Marino-Nachison contributed to this article.
