Amazon announced plans to lay off 14,000 employees on Tuesday as part of its ongoing cost-cutting measures. The company also indicated plans to invest in its “biggest bets” and hailed the transformative powers of artificial intelligence. A memo sent out to employees confirmed that the ecommerce giant would be “reducing in some areas and hiring in others” — triggering an overall reduction of 14,000 roles.
An earlier report had suggested that the latest cuts could affect up to 30,000 people as Amazon sought to pare expenses and compensate for over-hiring during the peak demand of the COVID-19 pandemic. Amazon has been trimming smaller numbers of jobs over the past two years across multiple divisions, including devices, communications and podcasting. A source-based Reuters report suggested that the cuts beginning this week could affect a variety of divisions, including human resources, known as People Experience and Technology or PXT; operations, devices and services; and Amazon Web Services.
Amazon bets big on AI
“Some may ask why we’re reducing roles when the company is performing well. Across our businesses, we’re delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. What we need to remember is that the world is changing quickly. 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). We’re convicted that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business,” the company explained in a blog post.
CEO Andy Jassy had predicted earlier this year that generative AI would reduce the corporate workforce of Amazon significantly over the next few years. He had also confirmed in June that the company had more than 1,000 generative AI services and applications in progress or built — calling that figure a “small fraction” of the overall plans. Jassy had also encouraged employees to get on board with the AI plans after Amazon announced plans to invest $10 billion towards to expanding its cloud computing and artificial intelligence infrastructure. He had also told industry analysts during a May conference call that the growth potential was ‘massive’ in the company’s AWS business.
Internal hiring for laid-off workers?
“We’re working hard to support everyone whose role is impacted, including offering most employees 90 days to look for a new role internally (the timing will vary some based on local laws), and our recruiting teams will prioritize internal candidates to help as many people as possible find new roles within Amazon. For our teammates who are unable to find a new role at Amazon or who choose not to look for one, we’ll offer them transition support including severance pay, outplacement services, health insurance benefits, and more,” the company added.
