Amazon to cut 14,000 white-collar jobs

The Amazon logo in the lobby of a building in Manhattan, Oct. 18, 2022. Amazon is bracing for major job cuts among its corporate employees starting on Tuesday, as it spends aggressively on artificial intelligence development, according to two people familiar with the cuts. (Karsten Moran/The New York Times)

By KAREN WEISE

Amazon said earlier this week that it planned to cut 14,000 corporate jobs, as it spends aggressively on artificial intelligence development.

Beth Galetti, Amazon’s executive in charge of human resources, said in a memo to staff that the layoffs would allow the company “to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”

Another round of corporate cuts is expected in January, after the holiday shopping season, according to two people familiar with the cuts, speaking before the reductions were announced.

The company had $18 billion in profit in the latest quarter and has increased spending on data centers that develop leading artificial intelligence systems. Capital expenses, which include data centers, are expected to top $120 billion this year, up almost 50% from last year.

“Some may ask why we’re reducing roles when the company is performing well,” Galetti wrote Tuesday. “The world is changing quickly,” she added, and AI represented “the most transformative technology we’ve seen since the internet,” convincing Amazon executives to organize the company “more leanly, with fewer layers.”

In June, Amazon CEO Andy Jassy told employees that efficiency gains from using AI would shrink the company’s corporate workforce over the next few years. “We will need fewer people doing some of the jobs that are being done today,” he wrote. While that may create new opportunities, he predicted that the overall corporate workforce would be smaller as a result.

Amazon has also looked to rein in the growth of its warehouse and other blue-collar workers, who make up most of its more than 1.5 million employees. The New York Times reported last week that the company had plans to use automation to avoid hiring more than 600,000 warehouse employees in a decade even as it expected to sell twice as many items over that period.

Amazon last saw widespread layoffs almost three years ago, in a series of cuts over several months that trimmed 27,000 positions. The company’s workforce had ballooned during the early COVID-19 pandemic, topping 1.6 million. Though the business has since grown substantially, it had 1.5 million workers at the end of June.

Amazon’s competitors have been turning to layoffs as well. Microsoft cut about 15,000 roles in the early summer. Target last week said it would trim roughly 1,800 corporate jobs, and Meta laid off 600 people.