Amazon cuts 14K jobs, cites AI as driving force behind layoffs

Amazon has cut 14,000 corporate jobs, directly citing artificial intelligence as “the most transformative technology we’ve seen since the internet” and a key driver behind the decision to streamline operations. The layoffs affect roughly 4% of Amazon’s corporate workforce, with 2,303 positions eliminated in Washington state alone, marking one of the company’s largest rounds of corporate cuts in recent years.

What you should know: Amazon’s leadership framed the layoffs as part of a broader AI-driven transformation to make the company “leaner and faster-moving.”

• Senior Vice President Beth Galetti sent the layoff notification email at 5 a.m. Seattle time on Monday morning, reaching employees across multiple divisions before their workday began.
• Affected employees have approximately 90 days to seek new internal roles, with those unable to transition receiving severance pay, outplacement services, and extended healthcare coverage.
• The cuts represent about 4% of Amazon’s 350,000 corporate employees, though only a fraction of its 1.5 million global workforce.

The big picture: This move continues Amazon’s post-pandemic workforce adjustment that began in 2022, following a massive hiring surge during COVID-19 when online shopping and cloud usage skyrocketed.

• Amazon eliminated 27,000 jobs in 2023, which was its largest layoff at the time.
• The company emphasized it continues aggressive hiring in strategic areas like artificial intelligence and cloud computing even while cutting elsewhere.
• Stock markets responded positively to the announcement, viewing it as a signal of operational efficiency and AI-driven productivity gains.

Why this matters: Amazon’s explicit connection between AI advancement and job cuts may signal a broader shift across the tech industry toward AI-powered workforce optimization.

• “AI is changing how people get information, how they process information, how they create content,” said Jeffery Shulman, a marketing professor at the University of Washington’s Foster School of Business. “And so we’re seeing that can all be done much more efficiently than ever before — and it requires far fewer people.”
• The move could serve as a bellwether for similar cuts across other major tech companies that often follow Amazon’s lead in workforce strategy.

What they’re saying: Local businesses and industry observers expressed mixed reactions to Amazon’s approach to workforce management.

• “They are one of the most valuable companies on the planet, and they seemingly lay off employees en mass once a quarter,” said Robert Kidd, who runs a Taiwanese food truck that has served Amazon workers for over a decade. “It just isn’t fair to the employees that do make them all of their money and don’t seem to get rewarded for it.”
• “You’re seeing the stock market applaud these cuts,” Shulman noted. “It signals that maybe they can rely on AI, maybe they can operate more efficiently, and maybe they can go forward with a lower payroll.”

Key details: The layoffs will take effect beginning January 26, 2025, affecting roles across multiple departments and locations.

• Eliminated positions include software development engineers, recruiters, senior managers, directors, and product managers.
• The cuts impact distribution centers, Seattle headquarters staff, and remote workers throughout Washington state.
• Amazon’s memo described the restructuring as designed to “reduce bureaucracy, remove layers, and shift resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”