Amazon targets as many as 30,000 corporate job cuts: sources

[SAN FRANCISCO] Amazon is planning to cut as many as 30,000 corporate jobs beginning on Tuesday (Oct 28), as the company pares expenses and compensates for overhiring during the peak demand of the pandemic, according to three sources familiar with the matter.

The figure represents a small percentage of Amazon’s 1.55 million total employees, but nearly 10 per cent of its roughly 350,000 corporate employees. This would mark Amazon’s largest job cut since late 2022, when it started to eliminate around 27,000 positions.

An Amazon spokesperson declined to comment. Amazon has been trimming smaller numbers of jobs over the past two years across multiple divisions, including devices, communications and podcasting. The cuts beginning this week may affect a variety of divisions, including human resources, known as People Experience and Technology or PXT; operations, devices and services; and Amazon Web Services (AWS), the sources said.

Managers of impacted teams were asked to undergo training on Monday on how to communicate with staff following e-mail notifications that will start going out on Tuesday morning, the sources said.

Amazon CEO Andy Jassy is undertaking an initiative to reduce what he has described as an excess of bureaucracy, including by reducing the number of managers. He installed an anonymous complaint line for identifying inefficiencies that has elicited some 1,500 responses and over 450 process changes, he said earlier this year. Jassy said in June that the increased use of artificial intelligence (AI) tools would likely lead to further job cuts, particularly through automating repetitive and routine tasks.

“This latest move signals that Amazon is likely realising enough AI-driven productivity gains within corporate teams to support a substantial reduction in force,” said Sky Canaves, an eMarketer analyst. “Amazon has also been under pressure in the short-term to offset the long-term investments in building out its AI infrastructure.”

The full scope of this round of job cuts was not immediately clear. The sources familiar with the matter said that the number could change over time as Amazon’s financial priorities shift. Fortune earlier reported that the human resources division could be targeted with a cut of roughly 15 per cent.

A programme begun early this year to bring employees back in the office five days per week, among tech’s most stringent, has failed to generate sufficient attrition, said two of the sources, citing that as another reason for the size of the layoff.

Some of the employees who are not swiping in daily because they live far from corporate offices, or for other reasons, are being told they have voluntarily quit Amazon and must leave without severance, a savings for the company.

SEE ALSO

Layoffs.fyi, a website tracking tech job cuts, estimated that about 98,000 jobs have been lost so far this year among 216 companies. For all of 2024, the figure was 153,000. Amazon’s largest profit centre, cloud computing unit AWS, reported second-quarter sales of US$30.9 billion, a 17.5 per cent increase that was well below gains of 39 per cent for Microsoft’s Azure and of 32 per cent for Alphabet’s Google Cloud.

Estimates indicate that AWS will have boosted third-quarter sales by about 18 per cent to US$32 billion, a slight slowdown from last year’s 19 per cent increase. AWS is still reeling from a roughly 15-hour Internet outage last week that felled many of the most popular online services, such as Snapchat and Venmo.

Amazon appears to be expecting another big holiday selling season. It plans to offer 250,000 seasonal jobs to help staff warehouses, among other needs, the same as in the prior two years.

Amazon on Friday also announced a reorganisation of a segment of its PXT unit focused on diversity initiatives, a memo reviewed by Reuters showed. The changes largely involved promoting people to new roles. Amazon shares rose 1.2 per cent to US$226.97 on Monday.

The company plans to report third-quarter earnings on Thursday. REUTERS