As soon as media outlets released leaked Amazon documents suggesting the company could replace half a million warehouse jobs with robots, the e-commerce giant checkedmated itself and fired 14,000 mid-level managers instead.
The move could offer a glimpse of how AI is actually reshaping the workforce: not by immediately displacing the rote, manual, factory roles everyone expected, but by emptying the ranks of office workers who manage them.
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Amazon announced Tuesday that it will cut about 14,000 corporate jobs, or about 4% of its office workforce, as part of a restructuring aimed at “reducing bureaucracy” and “removing organizational layers,” according to a memo.
In the statement, Beth Galetti, Amazon’s senior vice president of people experience, said the cuts were designed to make the company leaner and more agile as it expands its investments in generative AI. In simple terms, it’s a bet that algorithms can handle many of the coordination, reporting and decision-making functions previously reserved for human managers.
Over the past year, CEO Andy Jassy has been outspoken about Amazon’s transformation.
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“We will need fewer people doing some of the jobs that are being done today,” he told employees earlier this year, citing the growing role of generative AI in planning, analysis and forecasting. These tools, he said, are already helping teams “move faster and make better decisions.”
This logic is spreading across corporate America. Generative AI systems have become proficient in precisely the types of tasks that fill mid-level managers’ days: synthesizing updates, writing memos, producing status reports, and summarizing meetings.
It’s unclear whether the layoffs announced Tuesday are a direct result of that calculation, that generative AI can perform middle-management tasks as well, or better, as humans. However, for executives under pressure to increase productivity at lower costs – and especially for those with a propensity to cut back – the appeal of flattening the hierarchy is obvious.
Flatten the hierarchy
However, there is an irony here. Amazon — the company that pioneered warehouse automation and made robots the poster children for blue-collar disruption — is now signaling that the office workforce could be the first to feel the bite of AI.
Gartner analysts estimate that by 2026, one in five organizations will use AI to eliminate at least half of their management layers.
The timing couldn’t be worse for workers, particularly younger ones, who are trying to climb the career ladder.
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Federal Reserve (Fed) Chairman Jerome Powell warned in September that hiring has slowed “notably,” especially for early-career employees.
Powell and other economists have acknowledged that the economy has entered a “low hiring, low firing” phase where companies are reluctant to add jobs even as growth continues.
“If people are becoming more productive, you don’t need to hire more employees,” Airbnb CEO Brian Chesky told the Wall Street Journal. “I see a lot of companies holding their own, forecasting and hoping to have smaller teams.”
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Amazon is not alone. This week, Target (clothing and accessories store) announced its first major round of layoffs in a decade, cutting just under 2,000 jobs.
Paramount, fresh off its merger with Skydance, is also laying off 1,000 people this week as it undergoes restructuring.
If AI flattens corporate hierarchies, creating a “low hiring, high firing” market, it could further erode the traditional corporate ladder and potentially be destructive across all layers of the economy. This is precisely the picture painted by Challenger’s latest report, Gray & Christmas, released on October 2.
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According to the outplacement and executive coaching firm, U.S. employers have announced 946,000 job cuts so far this year, the highest year-to-date total since 2020, with more than 17,000 explicitly attributed to artificial intelligence and another 20,000 linked to automation and “technology upgrades.”
Tech companies alone cut 108,000 jobs in 2025, and retail layoffs were up 203% from the previous year as companies brace for a slower holiday season, the company said.
“Job cut plans are very likely to exceed 1 million for the first time since 2020,” wrote Andy Challenger, senior vice president at Challenger, Gray & Christmas, in the report. “Previous periods with so many job cuts occurred during recessions or, as was the case in 2005 and 2006, during the first wave of automations that cost jobs in manufacturing and technology.”
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