Amazon cuts 16,000 jobs amid intensifying AI competition

Yesterday 14:20

By: Dakir Madiha

Amazon cuts 16,000 jobs amid intensifying AI competition

Amazon has announced plans to lay off 16,000 employees, marking its second major round of workforce reductions within three months. The move aims to streamline operations and boost agility as the company vies for dominance in the rapidly evolving artificial intelligence landscape.

In a recent company blog post, Beth Galetti, Amazon's senior vice president of people, explained that these changes focus on eliminating bureaucracy, flattening organizational layers, and enhancing decision-making speed. This follows a similar cut of 14,000 corporate roles in late October, aligning with CEO Andy Jassy's strategy to operate like a nimble startup amid AI-driven disruptions in the tech sector.

As America's second-largest private employer after Walmart, Amazon maintains over 350,000 corporate staff, per recent regulatory filings. The combined layoffs affect roughly 9 percent of its office workforce. Galetti emphasized that such reductions will not establish a recurring pattern, though Jassy has forecasted ongoing adjustments due to AI efficiencies. The company plans targeted hiring in key growth areas essential to its long-term priorities.

The cuts come as Amazon competes fiercely with rivals like Microsoft, Google, Meta, and OpenAI in scaling computing power and advanced language models poised to reshape the economy. Jassy has stressed that these measures prioritize operational efficiency over mere cost-cutting. Layoffs commenced this week, with affected employees offered 90 days to seek internal positions, followed by severance and benefits for those not retained.

A preliminary internal memo leaked Tuesday ahead of the official announcement, referencing the yet-to-be-published blog post. Separately, Amazon revealed plans to shutter its Amazon Fresh and Amazon Go grocery outlets, shifting emphasis to Whole Foods stores.

Jassy has repeatedly highlighted AI's transformative potential, predicting it will automate certain roles while creating demand for new ones across industries. He foresees billions of AI agents deploying soon, fundamentally altering workflows. While concerns mount over AI displacing white-collar jobs, recent analysis from Vanguard suggests high-exposure occupations are expanding faster than average, even outpacing pre-pandemic trends. Evidence of broad-scale disruption remains limited for now.