Amazon is preparing for another round of job cuts next week as it moves ahead with plans to reduce its corporate workforce by about 30,000 employees, according to Reuters, citing two people familiar with the matter.
According to the Reuters report, the job cuts could begin as early as Tuesday and are expected to be roughly the same size as the layoffs announced last year.
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Amazon had already cut around 14,000 white-collar jobs in October last year, which was about half of the total reduction first reported by Reuters. Amazon has not commented on the matter so far. Now, the second round of layoffs is expected to begin, with the tech giant expected to cut around 16,000 more jobs.
The upcoming job cuts are expected to impact several major divisions, including Amazon Web Services (AWS), the company’s retail business, Prime Video, and its human resources unit, known internally as People Experience and Technology. However, the people familiar with the matter told Reuters, the full scope of the layoffs is still not clear and warned that plans could change.
Amazon currently employs about 1.58 million people worldwide, most of whom work in warehouses and fulfilment centres. The planned 30,000 job cuts would make up a small share of its total workforce, but nearly 10 percent of its corporate staff.
If completed, this would mark the largest round of layoffs in Amazon’s 30-year history. The company previously cut about 27,000 jobs in 2022.
Employees laid off in October were told they would remain on Amazon’s payroll for 90 days. During that time, they were allowed to apply for other jobs within the company or look for work elsewhere. That 90-day period is set to end on Monday.
Why is Amazon reducing its workforce
When Amazon announced the October layoffs, the company linked the decision to the growth of artificial intelligence. In an internal letter at the time, Amazon said, “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.”
Many big companies are increasingly using AI to write software code and automate routine tasks as they look to cut costs and reduce reliance on human workers. Amazon has been heavily promoting its own AI tools and models, including during its annual AWS cloud computing conference in December.
However, Amazon CEO Andy Jassy later offered a different explanation. Speaking to analysts during the company’s third-quarter earnings call, Jassy said the layoffs were “not really financially driven and it’s not even really AI-driven.” Instead, he said the issue was company culture.
“It’s culture,” Jassy said, explaining that Amazon had become too bureaucratic. “You end up with a lot more people than what you had before, and you end up with a lot more layers.”