Amazon laying off about 14,000 corporate workers as it invests more in AI

Amazon said Tuesday that it will lay off about 14,000 corporate employees, marking the latest cuts in the company's multiyear effort to rein in costs.

In a blog post, the company wrote that the layoffs are being carried out to help make the company leaner and less bureaucratic, while it looks to invest in "our biggest bets" including generative artificial intelligence.

"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)," Beth Galetti, senior vice president of people experience and technology at Amazon, wrote. "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 businesses."

The layoffs are expected to ultimately be the largest corporate job cuts in Amazon's history, CNBC previously reported. The cuts could affect as many as 30,000 employees, according to Reuters, which cited sources familiar with the matter.

Employees in Amazon's cloud, grocery, video games, human resources, sustainability and communications, ads and devices units were informed of cuts early Tuesday morning, although the layoffs are expected to touch nearly every area of the company.

Amazon is the nation's second-largest private employer, with more than 1.54 million staffers globally as of the end of the second quarter. That figure is primarily made up of its warehouse workforce.

It has roughly 350,000 corporate and tech employees, meaning the 14,000 job cuts represent about 4% of that segment of its workforce.

The company indicated that it will continue to lay off employees in the coming year, even as it plans to keep hiring in "key strategic areas."

Amazon's job cuts come as companies across industries including tech, banking, auto and retail have pointed to the rise of generative AI as a force that's likely to or already changing the size of their workforces.

Several companies have indicated they can hire fewer employees and still grow their revenues, partly as a result of relying more on AI, which they believe will translate to greater efficiencies and productivity.

Amazon CEO Andy Jassy said in June that the company's workforce would shrink further as a result of it embracing generative AI, telling staffers that it "will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs."

Meta last week laid off about 600 staffers in its AI unit in an effort to reduce layers and operate more nimbly. Microsoft has cut more than 15,000 staffers this year as CEO Satya Nadella told staffers they must "reimagine our mission for a new era" of AI. Google made cuts to a number of units earlier this year and taken steps to reduce bureaucracy by eliminating 35% of managers overseeing small teams.

Jassy, who took the helm at Amazon from Jeff Bezos in 2021, has been on a campaign to slash costs across the company over the past few years. Amazon laid off 27,000 employees between 2022 and 2023, and job reductions have continued since then, though at a smaller scale.

Amazon is slimming down its workforce after it went on a hiring spree during the Covid-19 pandemic, partly to meet a surge in demand for e-commerce and cloud computing services.

The company has since moved to shutter some of its unprofitable initiatives, while committing to invest about $118 billion this year in AI development and cloud infrastructure. Amazon faces growing pressure to show its cloud and AI businesses aren't lagging behind rivals.

At the same time, Jassy been trying to overhaul Amazon's corporate culture and operate like the "world's largest startup" as it looks to stay competitive. Last September, as part of a mandate requiring corporate employees to work in the office five days a week, he set a goal to flatten organizations across Amazon by the first quarter of this year.

Earlier this month, Amazon said it planned to hire 250,000 workers for full-time, part-time and temporary roles in its fulfillment and transportation units to meet demand for the holiday shopping season.

Amazon is slated to report its third-quarter results on Thursday after the market closes.