Amazon Announces Major Layoffs, CEO Jassy Clarifies It’s Not Cost-Driven
Amazon is set to eliminate approximately 14,000 corporate jobs, commencing next week. This marks the second major round of layoffs since October 2022. With this new wave, the total job cuts will reach around 30,000, representing a significant restructuring effort within the organization.
Details of Amazon’s Major Layoffs
These layoffs will impact various departments, including:
- Amazon Web Services (AWS)
- Retail operations
- Prime Video
- Human Resources (People Experience and Technology – PXT)
This cut represents nearly 10% of Amazon’s corporate workforce, which consists of approximately 350,000 employees. Overall, the job reductions will account for less than 2% of Amazon’s total workforce of 1.58 million, most of whom work in warehouses and fulfillment centers.
CEO Andy Jassy’s Clarifications
CEO Andy Jassy has made it clear that the decision to reduce positions is not driven by financial concerns or artificial intelligence (AI). Instead, he emphasized that the cuts are necessary to address excessive bureaucracy and organizational layers. During a recent earnings call, he stated, “It’s culture,” indicating a desire to restore a more agile, startup-like environment within the company.
Previously, Amazon’s layoffs were associated with the impacts of AI, but Jassy’s comments have shifted the narrative. He highlighted the need to streamline operations by eliminating redundant management layers.
Context of the Layoffs
Amazon’s workforce reduction comes amid strong business performance. Senior Vice President of PXT, Beth Galetti, acknowledged the paradox, noting that reducing roles while the company is doing well raises questions. However, she stressed the importance of maintaining competitiveness by being organized more efficiently.
Following the layoffs in October, employees were granted 90 days to seek new positions within Amazon or to find external work. A similar support structure will be in place for the upcoming layoffs, which includes severance pay and extended health benefits.
Corporate Culture and Efficiency Initiatives
In an effort to identify inefficiencies, Jassy has instituted an anonymous complaint system, yielding over 1,500 responses and prompting more than 450 process changes. Additionally, he has implemented a strict five-day in-office work requirement, one of the industry’s most stringent policies on returning to office.
Despite these efforts, there has not been the expected voluntary attrition from employees. Overall, Amazon’s approach to these changes reflects ongoing challenges in communicating its restructuring strategy while addressing internal cultural shifts.
