"Amazon" lays off 14,000 administrative employees as part of its shift towards artificial intelligence and a "more agile" work environment
Amazon has announced its plans to reduce around 14,000 administrative jobs as part of its ongoing strategy to cut costs and increase operational efficiency, focusing its investments on transformative technologies such as generative artificial intelligence.
The company's official announcement came via its blog, where it confirmed that this step aims to make its organizational structure "more efficient and less bureaucratic," while continuing to pump investments into its "biggest strategic bets."
In a comment on the decision, Beth Galetti, Amazon's Vice President of Employee Experience and Technology, linked the restructuring process to the ongoing technological revolution, stating: "This generation of artificial intelligence is the most transformative technology since the advent of the internet, enabling companies to innovate faster than ever before, whether in existing markets or entirely new ones."
Galetti added, outlining the new vision for the organizational structure: "We are convinced that we need to operate with a more agile structure, fewer layers, and greater responsibilities, so we can move quickly to serve our customers and our business."
Reports from Reuters indicate that the actual number of those affected could reach 30,000 employees, according to informed sources. Meanwhile, CNBC described this process as the largest of its kind in Amazon's history regarding administrative jobs.
The company's global workforce exceeds 1.54 million employees, making it the second-largest private employer in the United States. Most of these employees are concentrated in warehouses, while the number of those working in administrative and technical departments is estimated at around 350,000 employees. Thus, laying off 14,000 employees represents about 4% of this specific segment.
The company indicated that it will continue additional layoffs over the next year, while continuing to hire in "core strategic sectors."
Amazon's move comes amid a transformation occurring across multiple sectors such as technology and banking, where companies are restructuring their teams with the rise of reliance on generative artificial intelligence, which is beginning to change the dynamics of the workforce and the nature of jobs. These companies see that relying on artificial intelligence allows them to achieve revenue growth with fewer employees, thanks to gains in efficiency and productivity.
Since taking over as CEO of Amazon from Jeff Bezos in 2021, Andy Jassy has led an intensive campaign to streamline expenses. The company laid off nearly 27,000 employees between 2022 and 2023 and has continued to reduce jobs at a slower pace since then.
Jassy had stated last June that the increasing reliance on generative artificial intelligence would lead to "the reduction of some existing jobs," while creating new jobs of a different kind.
Jassy's strategy has not been limited to layoffs; it has also included halting several unprofitable initiatives, while the company allocated about $100 billion this year to invest in developing artificial intelligence.
Jassy is also working on reshaping the work culture within the company to operate with the mindset of "the largest startup in the world." To embody this, Amazon required its administrative employees to return to work from the offices five days a week last September, as part of a broader plan to restructure management levels and make them more flexible.
