Amazon is making big changes. The tech giant plans to cut about 14,000 jobs in its corporate team. This move comes as Amazon looks to manage costs while investing heavily in artificial intelligence (AI).
Beth Galetti, a senior executive at Amazon, shared that the company needs to be “more lean” to fully take advantage of the opportunities presented by AI. This doesn’t come as a surprise. CEO Andy Jassy has already made moves to streamline operations. He wants Amazon to behave like a “large start-up,” which means fewer leaders and more ownership at every level.
Back in June, Jassy hinted that advancements in AI might lead to reducing the company’s workforce further in the coming years. This reflects a wider trend in tech, where many companies are prioritizing efficiency as they invest in new tech.
Amazon plans to invest a staggering $118 billion this year. Much of this will go toward building up AI infrastructure, like data centers that support its cloud services. They’re in a fierce competition with tech giants like Microsoft and Google to lead in AI.
As of December 2024, Amazon had around 1.5 million employees worldwide. The current cuts represent about 4% of its corporate staff, which is approximately 350,000 people. This is a significant reduction, marking the largest job cuts since Amazon let go of 27,000 employees last year. It’s a challenging time in the tech industry, where many companies are facing economic pressures.
Amazon is also gearing up to share its quarterly earnings soon. Recently, it warned that heavy spending on AI might affect its profits. Analysts expect earnings to fall between $15.5 billion and $20.5 billion for the quarter, lower than what many had predicted.
Looking forward, Amazon’s revenue is slated to rise by 11%, reaching $708.8 billion. This would make it the largest U.S. company by revenue, surpassing even Walmart, which is expected to bring in $701.3 billion this fiscal year.
In the grand scheme, many are curious about how these job cuts will impact Amazon’s innovation in the AI space. Experts suggest a balance is crucial. While reducing costs is essential, maintaining a strong workforce is vital for driving new ideas and technologies.
As the landscape of tech continues to shift, Amazon’s approach will likely be watched closely. The company’s ability to manage its workforce while investing in cutting-edge technologies could set trends for others in the industry.
For more insights into AI and its impact on the workforce, you can check out reports from Forrester Research.
