Amazon is planning one of its biggest corporate layoffs yet cutting up to 30,000 office jobs starting Tuesday.
Amazon aims to cut expenses and make up for the overhiring that occurred during the COVID-19 pandemic, when demand for online shopping skyrocketed.
The scale
The overall number of employees at Amazon is 1.55 million.
Of them, about 350,000 work in business (office) settings.
Therefore, 30,000 layoffs would amount to about 10% of its white-collar workers, which is a big step.
This would be the biggest layoff for Amazon since it cut over 27,000 jobs in 2022.
The impacted teams:
Several departments are expected to be affected by the layoffs, including:
Human Resources (PXT, or People Experience and Technology)
Activities
Products and Services (such as Kindle and Alexa)
AWS, or Amazon Web Services
How it's being handled:
On Monday, managers in the impacted departments received training on how to break the news. Amazon intends to notify affected employees by email beginning on Tuesday morning.
Andy Jassy, the CEO of Amazon, is working to reduce needless bureaucracy (too many levels of administration and delayed processes) and increase the company's efficiency.
In order to accomplish this, he established an anonymous complaint mechanism that allowed staff members to identify inefficiencies. It was successful, as Amazon got over 1,500 proposals, which resulted in 450 process enhancements.
Artificial Intelligence (AI) is a major factor in Amazon's current job cuts. According to Jassy, many repetitive activities will be replaced by automation using AI, requiring fewer workers to complete the same amount of labor.
According to analysts, Amazon can afford to further downsize its employment because AI is increasing the productivity of corporate teams. Although the precise number of layoffs is still up in the air and may alter as Amazon's priorities change, reports indicate that the HR department may lose about 15% of its workforce.
Amazon's stringent return-to-office policy is another factor contributing to layoffs. Workers who don't show up for work five days a week—especially those who live far away—are informed they've "voluntarily quit," which means they have to depart without severance pay in order to save the business money.
According to Layoffs.fyi, over 200 enterprises in the tech sector have lost almost 98,000 workers so far this year.
In terms of revenue, its most lucrative sector, Amazon Web Services (AWS), is still expanding, albeit more slowly than rivals like Google Cloud and Microsoft Azure. Recently, AWS experienced a 15-hour outage that impacted popular apps like Venmo and Snapchat.
Despite all of this, Amazon is employing 250,000 seasonal workers for warehouses and logistics in anticipation of a successful holiday season, just like in previous years.
Last but not least, Amazon's stock price increased 1.2% ahead of its upcoming earnings release after the company made some organizational adjustments in its diversity division (PXT segment) by promoting a number of employees.