Amazon is reportedly bracing for a massive reduction in its corporate workforce, with plans to lay off tens of thousands of office workers as the tech giant prioritizes cost-cutting and aggressive investment in artificial intelligence (AI).
Multiple news outlets indicate that up to 30,000 positions will be eliminated in a belt-tightening move set to begin this week. This figure represents nearly 10 percent of Amazon’s roughly 350,000 corporate jobs. Importantly, these cuts are reported not to affect the distribution and warehouse staff, who make up the majority of the company’s more than 1.5 million employees globally.
The layoffs are being framed by CEO Andy Jassy’s focus on efficiency and removing “redundant layers” in the corporate structure. Jassy has been vocal about the potential for AI to streamline operations from engaging with customers to making offices more efficient.
“Our conviction that AI will change every customer experience is starting to play out,” he stated in the company’s last quarterly earnings call. The reduction in workforce is seen as a way to trim expenses while simultaneously freeing up capital for its substantial, long-term AI infrastructure investments.
The company is under pressure to demonstrate the financial merit of its huge AI spending as it prepares to report its next quarterly earnings this Thursday.
Industry analysts note that Amazon Web Services (AWS), its highly profitable cloud computing unit, will be expected to show both revenue acceleration and operating margin improvement in light of its massive commitment to AI.
The company did not reply to queries regarding the planned cuts, but its shares ended the formal trading day up slightly as word of the potential cost-cutting measure spread, suggesting investors view the move as a sign of fiscal discipline.
The layoff news follows closely on the heels of a major AWS outage that took popular internet services offline for hours last week, illustrating the deep reliance the global digital economy has on the tech giant’s infrastructure.
The disruption, which was attributed to an issue involving the Domain Name System (DNS)—often called the internet’s address book—affected a vast array of services. Users reported problems with streaming platforms, including Amazon’s Prime Video service and Disney+, as well as mobile messaging apps like WhatsApp and Signal across Europe.
Popular online services like Fortnite, Airbnb, Snapchat, and Duolingo were hit, and even financial institutions and Amazon’s own e-commerce shop experienced issues, with some banks pointing directly to AWS as the source of their problems.
AWS, which leads the cloud computing market, eventually fixed the issue. However, the incident serves as a stark reminder of the widespread consequences when a technical fault arises within the crucial infrastructure of a global tech leader.
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