Amazon has made a big announcement regarding the termination of 30,000 corporate positions. In this way, the company is letting go of the largest number of workers since the year 2022. One of the main reasons for this decision is that the tech giant wants to cut costs, improve the reliability of artificial intelligence in the company, and make the whole operation more efficient through AI.
Reuters has reported that the layoffs will be made across several sectors of the company as Amazon is looking to reduce the layers of management and at the same time, use AI to take over some of the tasks and automate the process.
Corporates Cuts Across Divisions
Starting from Tuesday, managers at Amazon will start to notify the workers who are going to lose their jobs. The layoffs will mainly be in the corporate sector, which constitutes around 10% of the company’s 350,000 corporate employees. Even though the layoffs constitute a little portion of Amazon’s total workforce of 1.5 million, it is still one of the most notable upheavals in the workforce since the last time the company laid off 27,000 workers three years ago.
Getting Hit: HR, Devices, and AWS
The big divisions like Human Resources, Devices, Operations, and even AWS (Amazon Web Services) are going to be operating with reduced staff. There is information that the HR department could let go of up to 15% of its team. These layoffs come after small disruptions in 2023 and 2024 that affected people involved in projects like Alexa and Amazon Music Podcasts.
AI and Automation Fueling Change
Andy Jassy, the CEO, has firmly advocated transforming Amazon into a leaner and more tech-oriented entity. The company is increasingly using AI to automate activities that are done manually; the result is that greater efficiency is being achieved with fewer workers. Analysts believe the above-mentioned changes point to a wider trend across the tech industry where AI is used to bring down costs and at the same time increase output.
Return-to-Office Policy Raises Internal Strain
Out of all the major tech firms, Amazon’s return-to-office requirement of five days a week is among the most stringent. A number of employees who have reportedly ignored the policy on numerous occasions have been silently marked as “resigned” without receiving any severance pay and part of the diversity and inclusion unit within HR has been reshuffled. The die-hard policy is badly received by the remote employees but management considers it a vital step in establishing accountability and collaboration again.
Holiday Hiring in Full Swing Despite Layoffs
Amidst all the layoffs, Amazon is still looking for 250,000 seasonal workers for the forthcoming holiday shopping season, which would be the same amount as last year. On the other hand, AWS is still Amazon’s most lucrative branch but it surely has strong competition from Microsoft Azure and Google Cloud.
Monday saw a 1.2% increase in Amazon’s share price as investors responded positively to this renewed company cost-control strategy so close to the quarterly report of the next earnings.
