Amazon braces for major job cuts

Amazon is bracing for major job cuts among its corporate employees starting Tuesday, as it spends aggressively on artificial intelligence development, according to two people familiar with the cuts.

Another round of corporate cuts is expected in January, after the holiday shopping season, the people said.

One of the people said that Amazon was looking to cut billions of dollars in its operating expenses, and that it had given the leaders of the groups facing cuts, including human resources, targets to trim 10% to 15% of their costs related to headcount. More senior roles, like directors, are expected to be harder hit than in earlier rounds of layoffs, the people said.

Reuters, which reported the layoffs earlier Monday, said the cuts could total about 30,000 jobs, or almost 10% of the company’s corporate ranks.

Amazon declined to comment.

The company had $18 billion in profit in the latest quarter and has increased spending on data centers that develop leading artificial intelligence systems. Capital expenses, which include data centers, are expected to top $120 billion this year, up almost 50% from last year.

In June, Amazon CEO Andy Jassy told employees that efficiency gains from using AI would shrink the company’s corporate workforce over the next few years. “We will need fewer people doing some of the jobs that are being done today,” he wrote. While that may create new opportunities, he predicted that the overall corporate workforce would be smaller as a result.

Amazon has also looked to rein in the growth of its warehouse and other blue-collar workers, who make up most of its more than 1.5 million employees. The New York Times reported last week that the company had plans to use automation to avoid hiring more than 600,000 warehouse employees in a decade, even as it expected to sell twice as many items over that period.

Amazon last saw widespread layoffs almost three years ago, in a series of cuts over several months that trimmed 27,000 positions. The company’s workforce had ballooned during the early COVID-19 pandemic, topping 1.6 million. Though the business has since grown substantially, it had 1.5 million workers at the end of June.

Amazon’s competitors have been turning to layoffs as well. Microsoft cut about 15,000 roles in the early summer. Target last week said it would trim roughly 1,800 corporate jobs, and Meta laid off 600 people.

This article originally appeared in The New York Times.