Amazon Cuts 30,000 Jobs in Major AI Shift

Amazon is preparing to lay off tens of thousands of employees in a major cost-cutting initiative, according to recent US media reports. The e-commerce and tech giant plans to eliminate at least 30,000 corporate and office roles. This significant workforce reduction is expected to begin this week.

The planned cuts will impact nearly 10% of Amazon’s corporate employees, a group that numbers approximately 350,000 people. Importantly, these layoffs are not expected to affect the company’s massive distribution and warehouse workforce. Amazon employs more than 1.5 million people globally, with the majority working in these operational roles.

Amazon’s Strategic Shift

While Amazon has not officially commented on the reports from the Wall Street Journal and New York Times, the move signals a strategic shift. The company is increasing its investments in artificial intelligence while streamlining other areas of its business. Amazon shares showed a slight increase as news of the potential cost-cutting measures spread.

CEO Andy Jassy has repeatedly emphasized AI’s transformative potential across Amazon’s operations. He believes artificial intelligence can enhance customer interactions and improve internal efficiency. During the last earnings call, Jassy noted their conviction that AI will change every customer experience is starting to play out.

As detailed in the complete version, there are several key factors to consider.

Pressure on Cloud Services and AI Investments

All eyes are on Amazon’s upcoming quarterly earnings report, where the company faces pressure to demonstrate returns on its substantial AI investments. Industry analysts are particularly watching Amazon Web Services (AWS), the company’s cloud computing division. AWS needs to show both revenue acceleration and operating margin improvement despite massive AI spending.

The timing is crucial as Amazon recently experienced a significant AWS outage that affected numerous popular internet services. The disruption impacted streaming platforms like Prime Video and Disney+, along with services including Perplexity AI, Fortnite, Airbnb, and banking institutions. The incident highlighted how dependent the digital ecosystem has become on Amazon’s cloud infrastructure.

As one of the world’s largest tech employers, Amazon’s decision to cut tens of thousands of positions reflects broader industry trends. Companies are reallocating resources toward emerging technologies like artificial intelligence while maintaining financial discipline in other operational areas.