Just a week after reports suggested that Amazon aimed to replace up to 75% of its workforce with robots, the retail and technology giant announced a significant layoff of approximately 14,000 employees. The company framed this move as an effort to reduce "bureaucracy" and streamline its organizational structure to better focus on its most promising ventures, particularly artificial intelligence (AI). This decision underscores Amazon’s strategic pivot toward leveraging AI and automation technologies to accelerate innovation and enhance operational efficiency.
Beth Galetti, Amazon’s Senior Vice President of People Experience and Technology, emphasized in a blog post that the current generation of AI represents the most transformative technology since the internet. According to Galetti, AI enables companies to innovate more rapidly across both existing market sectors and entirely new ones. She stated that to harness this potential, Amazon must become more agile, with fewer management layers and greater employee ownership. This restructuring aims to speed up decision-making and improve customer service and business outcomes.
Despite the emphasis on AI, Amazon representatives have downplayed the role of artificial intelligence as the direct cause of most job cuts. A company spokesperson told CNET that the layoffs are primarily about “reducing layers, increasing ownership, and helping reduce bureaucracy to drive speed and ownership.” The goal, the spokesperson said, is to position Amazon to be more inventive, collaborative, and connected, all in service of delivering the best possible customer experience.
According to reports from Reuters, which cited information from Amazon employees, the layoffs are disproportionately affecting certain departments such as devices, advertising, Prime Video, human resources, and Amazon Web Services (AWS). Even Twitch, Amazon’s live-streaming platform, has reportedly been impacted, although the exact number of affected Twitch employees remains unclear. An internal communication described the Twitch layoffs as involving a "small number" of employees.
This round of layoffs is expected to be the largest in Amazon’s history. Reuters also reported that further reductions are anticipated, potentially bringing the total number of job cuts to around 30,000. This announcement comes just months after CEO Andy Jassy outlined an ambitious vision for ramping up Amazon’s development of generative AI and AI-powered agents, which are designed to perform a wide array of tasks to drive innovation and maintain Amazon’s competitive edge.
Amazon’s layoffs are part of a broader industry trend. In recent months, several major technology companies, including Microsoft, Accenture, Salesforce, and India’s Tata Consultancy Services (TCS), have also announced significant workforce reductions. These cuts reflect a frenzied push to invest heavily in AI technologies while simultaneously managing operational costs and efficiency.
The urgency to invest in AI is supported by market research indicating rapid growth in the global AI infrastructure sector. A report issued earlier in October projects that this market, which is driven largely by the need for massive data centers to support AI workloads, will surge from $26.18 billion in 2024 to an estimated $221.40 billion by 2034. This represents an annual growth rate of nearly 24%, highlighting the massive scale and importance of AI infrastructure in the coming decade.
Amazon, as the third-largest employer in the United States, is no stranger to automation. The company already deploys more than one million robots across its delivery and fulfillment networks, a number that exceeds two-thirds of its human workforce. The company’s goal to automate 75% of its operations reflects its commitment to reduce reliance on human labor in favor of robotic systems. According to CNBC, if Amazon succeeds in automating as planned, it could save approximately $4 billion annually in warehouse labor costs alone.
Central to Amazon’s automation ambitions is a rapid and substantial investment in AI technologies. CEO Andy Jassy expressed this vision in a June blog post, revealing that Amazon currently has over 1,000 generative AI services and applications either in development or already built. However, he acknowledged that this represents only a fraction of what the company ultimately plans to create. Jassy pledged that Amazon will "lean in further" with AI in the coming months, aiming to use AI agents to carry out many tasks, speed innovation, and maintain the company’s hallmark traits of being customer-obsessed, inventive, fast-moving, lean, and scrappy.
While the company focuses on its future, the human cost of these changes is significant. Thousands of Amazon employees received layoff notices, a painful reality for many who had recently been required to return to office work. Kristi Coulter, a former Amazon employee of 12 years and author