Did Amazon slash 14,000 jobs to cut costs and adopt AI?
On Thursday, Andy Jassy, the Chief Executive Officer of Amazon, provided a clarification regarding the recent layoffs of 14,000 corporate employees that occurred earlier this week. Reports says that he emphasized that the layoffs were not driven by a quest for artificial intelligence or cost-cutting measures. He asserted that these were not the reasons for the layoffs. During the quarterly earnings call, Jassy pointed to “culture” as the reason for these layoffs. He wrapped up by stating, “The announcement that we made a few days ago was not really financially driven, and it’s not even really AI-driven, not right now at least.” The answer is that it is culture. The report indicates that Jassy is seemingly focused on enhancing the “performance standards, enforcing discipline, and achieving the elimination of bureaucracy.”
Beth Galetti revealed that the company is laying off employees, even as it continues to perform strongly. She linked this decision to the rapid transformations instigated by artificial intelligence. “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),” she stated. In the quarterly earnings call, Jassy noted that the company’s swift growth had led to “a lot more layers,” complicating the decision-making process. She also emphasized that with the ongoing transformation in artificial intelligence, “there has never been a more critical time for the company to operate leaner and move faster.”
He elaborated, stating, “Sometimes, without realizing it, you can weaken the ownership of the people that you have who are doing the actual work. And it can result in a decrease in your pace.” Jassy contended that the organization has been plagued by an overabundance of administrative layers, leading to the stifling of initiative. He stated that the layoffs are being implemented with the intention of regaining the agility and sense of ownership that distinguished Amazon during its formative years. He stated that the aim of the layoffs is to “restore the nimbleness” and “ownership” that characterized the early days of Amazon, during the company’s formative period. He remarked, “We are dedicated to conducting our business in the same manner as the largest startup in the world.” Jassy stated that the total of $1.8 billion in severance fees was incurred due to the layoffs that took place in the most recent quarter.
In a significant move aimed at optimizing operations following excessive hiring during the Covid-19 pandemic, the e-commerce giant is reportedly contemplating the elimination of more than 30,000 positions, as detailed in a report released on October 27. Although this figure constitutes a relatively minor segment of Amazon’s total workforce of 1.55 million, it corresponds to ten percent of the company’s entire staff of 350,000 corporate employees. Anticipation loomed large regarding the forthcoming wave of job cuts, expected to be the most substantial since the corporation executed 27,000 layoffs between late 2022 and early 2023. Amazon has announced its intention to hire 250,000 seasonal workers to accommodate the expected increase in demand during the upcoming holiday shopping season. This announcement follows the recent layoffs that have taken place within the corporation.
