Introduction to Amazon’s Restructuring
Amazon announced that it would reduce its workforce by about 14,000 employees as part of a broader restructuring driven in part by the online retail giant’s investments in artificial intelligence. The company announced this in a message to employees published on its website, stating that the cuts would help “further cut red tape, cut layers and shift resources to ensure we invest in our biggest bets and what matters most to our customers’ current and future needs.”
Restructuring after the COVID Delivery Boom
Amazon is adjusting to demand that is slightly lower than at its peak during the COVID pandemic lockdowns, when the company hired additional staff to handle the surge. Over the past two years, the e-commerce giant has gradually cut jobs across its businesses, including books, devices, and its podcast business. The company will "continue to reduce staff in some areas and add new employees in others" through 2026.
Support for Affected Employees
Employees were told that most affected employees would have 90 days to find a new position internally; recruiting teams would prioritize such candidates, the company said. This approach aims to support employees during the transition period and provide them with opportunities to adapt to the company’s evolving needs.
Impact of AI Investments on Job Cuts
Amazon CEO stated that adopting generative AI would reduce the company’s overall workforce in the coming years. The e-commerce giant is focusing much of its capital investment on building AI and cloud infrastructure, including building a $10 billion campus in North Carolina. “This generation of AI is the most transformative technology we have seen since the Internet, and it enables companies to innovate much faster than ever before.”
Amazon’s AI Initiatives
The company is involved in the growth of AI as it puts resources into building its own AWS business, which aims to compete with other major players such as OpenAI, Google, and Microsoft. An AWS outage last week showed just how far the tool has spread, with glitches affecting everything from online games to popular apps.
Workforce and Financial Overview
Amazon employs around 350,000 corporate employees and approximately 1.56 million in total. Tuesday’s cuts affect about 4% of the company’s workforce. It was the largest cut since 2023, when the company announced 27,000 job cuts in two waves. The company will report its quarterly results, with the latest numbers showing 17.5% growth for its AWS cloud computing arm.
