Amazon is set to eliminate up to 30,000 corporate positions starting on Tuesday, in an effort to reduce costs and address overstaffing that occurred during the heightened demand of the pandemic, according to three individuals with knowledge of the plans.
This number accounts for a minor fraction of Amazon's overall workforce of 1.55 million employees, yet it constitutes approximately 10% of its estimated 350,000 corporate staff. If implemented, this would represent the company's most significant reduction in jobs since the end of 2022, when it began cutting about 27,000 roles.
An Amazon spokesperson declined to comment.
Over the last two years, Amazon has been making smaller-scale job reductions in various units, such as devices, communications, and podcasting. The upcoming cuts, which are scheduled to commence this week, could impact numerous divisions, including human resources—referred to internally as People Experience and Technology or PXT—as well as operations, devices and services, and Amazon Web Services, the sources indicated.
Managers overseeing the affected teams were required to complete training on Monday regarding how to handle communications with employees after email notifications begin being sent out on Tuesday morning, the individuals said.
Amazon CEO Andy Jassy is leading an effort to eliminate what he has characterized as excessive bureaucracy, which includes decreasing the number of managers. Earlier this year, he mentioned that he had established an anonymous complaint line to pinpoint inefficiencies, resulting in around 1,500 responses and more than 450 process modifications.
In June, Jassy stated that the growing adoption of artificial intelligence tools would probably result in additional job reductions, especially by automating tasks that are repetitive and routine.
"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 complete extent of this series of job cuts was not clear right away. The people familiar with the matter noted that the total could fluctuate as Amazon's financial focuses evolve. Fortune had previously reported that the human resources division might face a reduction of about 15%.
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A policy introduced at the beginning of this year requiring employees to return to the office five days a week—one of the strictest among technology companies—has not produced enough voluntary departures, according to two of the sources, who pointed to this as a further factor contributing to the scale of the layoffs. Certain employees who are not checking in daily, whether due to living distant from corporate offices or for other reasons, are being informed that they have voluntarily resigned from Amazon and are required to depart without severance pay, which represents a cost saving for the company.
Layoffs.fyi, a site that monitors job cuts in the technology sector, calculated that approximately 98,000 positions have been eliminated this year across 216 companies. For the entirety of 2024, the total stood at 153,000.
Amazon's primary source of profit, its cloud computing division AWS, posted second-quarter revenue of $30.9 billion, reflecting a 17.5% rise that fell significantly short of the 39% growth for Microsoft's Azure and the 32% for Alphabet's Google Cloud.
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Projections suggest that AWS will achieve an approximate 18% increase in third-quarter sales to $32 billion, marking a minor deceleration from the 19% growth in the previous year. AWS continues to recover from a nearly 15-hour internet disruption last week that disrupted numerous widely used online services, including Snapchat and Venmo.
Amazon seems to be anticipating a robust holiday shopping period once again. The company intends to provide 250,000 seasonal positions to assist with staffing warehouses and other requirements, matching the figure from the previous two years.
On Friday, Amazon additionally revealed a restructuring of a portion of its PXT unit dedicated to diversity initiatives, as detailed in a memo obtained by national media. The adjustments primarily consisted of elevating individuals to new positions. Amazon shares increased by 1.2% to $226.97 on Monday. The company is scheduled to release its third-quarter earnings on Thursday.
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