The US e-commerce giant announced today that it is cutting around 14,000 jobs “globally”, without specifying in which countries workers will be directly affected. The announcement was made in a statement by Beth Galetti, vice president of human resources and technology, who emphasized that the reduction is part of the company’s efforts to cut red tape, remove layers of management and reallocate resources.
The company noted that the reductions will be accompanied by new hires in some areas, with the final result reducing the total number of positions by 14,000. The layoffs are mainly in areas such as devices, advertising, Prime Video, human resources and the Amazon Web Services (AWS) cloud computing unit.
The impact of artificial intelligence
The cuts are partly related to its increasing use in the organization. Amazon CEO Andy Jassy had warned since June that automation of mundane and repetitive tasks through AI would lead to job cuts in the corporate sector. The company is expected to invest about $118 billion this year in AI and cloud infrastructure, with the goal of accelerating innovation and managing resources more efficiently.
Galetti described the new generation of artificial intelligence as “the most important technology since the Internet,” capable of enabling businesses to innovate much faster. At the same time, the layoffs offer an early glimpse of the potential broader impact artificial intelligence may have on the world’s workforce.
Employees were notified via their personal emails early this morning, with Galetti’s letter stating: “You are no longer required to perform work on behalf of Amazon.” Those affected are offered the possibility of a video call with a representative of the human resources department and a deadline of 90 days to look for a new position within the company.
The announcement has caused a political backlash in the US. Senator Bernie Sanders has called Amazon founder Jeff Bezos to account for the potential impact of automation on hundreds of thousands of jobs. At the same time, other senators demanded an explanation for the fact that Amazon remains the largest employer of foreign workers on H-1B visas while at the same time cutting staff.
A company in transformation
Amazon has approximately 1.56 million employees worldwide, of which approximately 350,000 are in its corporate workforce. The recent reductions follow a period in which the company had made incremental cuts across divisions including books, devices and the Wondery podcast. These cuts, according to Galetti, helped the teams operate more quickly and efficiently.
Investors appeared to have limited concern as Amazon shares rose slightly in premarket trading, with the company set to release third-quarter financial results on Thursday.
